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September was a busy trading month at the Riga Stock Exchange. Total Latvian capital market turnover amounted to EUR 101 million, equity trading volume reaching EUR 26.37 million, yet not managing to beat the record-high LVL 30.44 million in May. Debt securities were traded at EUR 74.63 million worth. Equity market capitalisation at the end of the month was LVL 332.45 million (EUR 611.94 million), which is a 10.98% more than at the end of August. Both indexes have appreciated to the previous month: Dow Jones RSE by 11.03%, and RICI index by 3.96%.
In September two primary placements of Latvijas Hipotçku un zemes banka mortgage bonds were run. All the mortgage bonds offered were auctioned at total value of LVL 713 480 (LVL 305 280 on September 7, maturity on 15.08.2003, coupon 8%, and LVL 408 200 on September 21, maturity on 15.05.2005, coupon 8.5%). The securities were listed on the Official List. The Official List was also complemented by Nordic Investment Bank 2-year bonds at total value of LVL 10 million.
Habitually, secondary debt market remained active also in September. Most visible trades were with Government 5 year bonds (LVL 27.6 million), Government 2 year bonds (maturity on 06.11.2000, LVL 3.58 million), 3 year bonds (LVL 2.09 million), as well as 12 month T-bill (LVL 2.5 million).
Skandinaviska Enskilda Banken has received all the necessary approvals to preceed with Unibanka take-over bid. The offer period is from September 18 till October 27, the offered price remains LVL 1.90.
Tallinn
Increased trading activity was influenced mostly by the take-over bid of Swedish Skandinaviska Enskilda Banken (SEB) to the shareholders of second largest bank Eesti Ühispank, launched on September 11. Ühispank accounted for 72% of total turnover of EUR 55 million. The SEB bid to get the 100% ownership in the Estonian bank will close on October 20, after which it will probably apply for delisting of Ühispank.
The international rating agency Fitch upgraded Estonia's Long and Short-term foreign currency ratings to 'BBB+' and 'F2' from 'BBB' and 'F3', respectively. The Long-term local currency rating remains unchanged at 'A' and the outlook for all three ratings is now stable. Fitch said that despite being buffeted by the Asian and Russian crises and the bursting of the 1996-97 credit bubble, Estonia has emerged from the past three years in better shape than before.
The underlying structure of the economy has continued to strengthen with the decline of heavy industry and rapid growth in sectors where Estonia has a natural advantage. In addition, new high-technology industries have blossomed, supported by substantial inflows of foreign direct investment.
Estonia's current account deficit was at 4.5 percent of expected GDP in the second quarter 2000, according to preliminary data of the central bank. The deficit has decreased from 6.3 percent in 1999 and 9.2 percent in 1998. The central bank said that the move was mostly due to rise in exports.
Tallinn Stock Exchange and Estonian Central Depository for Securities completed the restructuring of the two Estonian securities market infrastructure companies, and formed a group under single strategic management. According to the new structure, Tallinn Stock Exchange is the parent group and it has two subsidiaries: depository and clearing house, which is responsible for clearing and settlement of securities trades.
Vilnius
In September, both total turnover and share turnover were the largest this year, which slightly improved statistical results of the NSEL. The most objective criterion for the evaluation of the market activity is the central market share turnover.
As compared to three quarters of last year, over the same period in 2000 the central market share turnover declined from LTL 112 million to LTL 86 million, or by almost 23%. However, bearing in mind the fact that trading in shares of the new market leader Lietuvos Telekomas began only in the mid-July of this year, the results seem not bad at all.
Moreover, this year the former market leader Bankas Hermis is no longer traded on the Stock Exchange and share turnover of Ðvyturys, which earlier was one of the most actively traded company on the central market, was symbolic. The total share turnover is mostly influenced by activities of strategic investors which considerably decreased during this year. The total share turnover of the three quarters amounted to LTL 378 million, which is by 55.6% lower than that of the same period last year.
On 6 October 2000, the Lithuanian Securities Commission registered the public offer of Skandinaviska Enskilda Banken to buy up the outstanding shares of Vilniaus Bankas at LTL 40.00 per share. The offer period is from 12 October to 17 November 2000.
