Despite promising increase of Riga Stock Market turnover by 22.07% reaching
600722.55 EUR and number of deals rising to 340 compared to last week’s 283, the OMXR index has fallen by 0.29%, thus continuing the negative trend of the Riga Stock Market. Also negative figures of Latvian economy were published this week. The inflation in 3rd quarter has reached 11.1% compared to the same period in year 2006 which is higher than other two
Baltic States have. Also it has been speculated by Danske Bank analyst that Latvian economy is approaching hard landing which also could impact stock prices for the worst – however, good for bearish brokers. In the main list all were falls except for Olainfarm (OLF1R) which stock price after several fluctuations during the week ended at the same level as Monday opening price. The biggest losers of the week were: Latvijas Gāze (GZE1R) -5.11%; Latvijas Kuģniecība (LSC1R) -6.8%; SAF Tehnika (SAF1R) -11.71%; and Ventspils Nafta (VNF1R) -6.87%.
The stock price of Latvijas Gāze (GZE1R) has had negative trend for last two months. This week the price of stock declined and its closing price was
12.81 EUR. One of the reasons for stock price decrease was shareholders’ prolonged negative perception of the company’s performance. Another reason for decrease was decline of Russian company’s ОАО Газпром, ао (GAZP) stock price which is one of the owners of Latvijas Gāze (GZE1R). However, the situation might change since the company has announced to increase the gas tariffs next year.
Latvijas Kuģniecība (LSC1R) experienced stock value decrease this week. The closing price was 1.92 € with a decrease of -6.8%. The decline started this Tuesday. Most probably the stock price will increase because during this week eighth of in total ten tanker newbuilds was launched. According to strategic objectives of Latvijas Kuģniecība (LSC1R), which is to expand and concentrate the activity in the handy and middle size tankers market segment of shipping, the fact of launching was benefiting for investors.
Although last week there was a slight increase in stock price of SAF Tehnika (SAF1R), this week it showed itself as the biggest loser. The huge drop of 11.71% can be associated with several facts. It has been announced that company’s loses of
6622 LVL (approximately
9200 EUR) are going to be paid by undivided profit of the company minimizing it to 3.4 millions
LVL (appr. 4.7 millions
EUR) which will stay as undivided profit of the company. The last thing might have influenced the perception of shareholders that annual report, which meeting was held this week, will not be favorable for them, giving signal to sell shares, thus, decreasing their price. However, there might be a rise in stock price. SAF Tehnika announced that itis going to present its new product in
South Africa’s telecom exhibition, which in case of favorable result will lead to expansion of the business and also increase of stock price.
The decline in Ventspils Nafta (VNF1R) stock price mostly is associated with the long run downward trend. The trend is expected to remain until the perception of shareholders and possible buyers of stock is improved. Most probably this will happen if company’s annual report is good.
This week was slightly negative in
Riga’s stock market. The economic situation in
Latvia is not stable due to the growth of inflation rate and other obstacles such as awareness of anxiety about devaluation of lat; however, the last has been denied by the Latvian officials. Changes in shareholders perceptions as well as stock prices can arise when the annual reports are being published.
