TSE (Tallinn) Market Overviews

Estonian Stock Market Overview
13/03/2006-17/03/2006

For the past few months there has not been a week like this one on the Tallinn Stock Exchange: the negative trend continues in an extreme manner, with all the Main list companies facing decreases in stock value. Due to that OMX Tallinn index fell quite substantially by 1.28% to 638.18. There was no reason for being happy concerning the trade activeness either: the overall turnover amounted only €6,443,264.08. Having that the Main List could have no leaders by definition, the I-List did a little bit better: AS Klementi (KLEAT) and AS Kalev (KLV1T) saw their stocks rising, but the rise was unimpressive – only 0.92%.

The “leader of the losers” this week was AS Baltika (BLT1T), with a dramatic 8.95%-drop. The stock, which had been rising quite steadily for over a year, is on a downside trend from the middle of February. On Tuesday the company announced an issue of 192,000 new shares, which increases its share capital by €122,710 to €3,844,254. A fall in share value could be caused simply by a supply effect, the adjustment of the price. The expansion of the company, revealed by the share capital increase, will, most probably, make the stock go up in the near future, bearing in mind that AS Baltika’s performance has been quite outstanding.

It is also worth mentioning the company that made the smallest fall in the Main List, 0.26%, and that is AS Eesti Telekom (ETLAT), the biggest telecommunication service provider in Estonia. The company’s share value should have been supported by the trading interest from Telia Sonera, the Swedish telecom giant, but it is lately interested in larger-scale operations, not paying much attention to the small Baltic country. The stock was thereby left on its own, and people are presumably selling it. It is this downward pressure from increased supply that pushes the price to decline. After a dramatic fall in the beginning of March, the stock is slowly starting to stabilize, and one can forecast a rise in value in the near future, followed by another peak, as it has been quite a few times before.

AS Tallinna Vesi (TVEAT), the Tallinn water treatment monopolist, showed a 0.53% decrease in share value this week, despite the fact that the company published its audited 2005 results which show a 5% before-tax profit growth. The second good news that could not hold the share value from falling was the fact that AS Tallinna Vesi is planning to invest more than €8 million into the city public networks in 2006. The stock has been declining since the middle of February, probably showing negative shareholders’ expectations concerning the 2005 results. If the investors are not satisfied with the latter report, the share value will continue to fall.
By Andrii Shekhirev