RSE (Riga) Market Overviews
Latvian Stock Market Overview23/01/2006 – 27/01/2006
This week in terms of activity was almost the same like the previous one. The total weekly turnover amounted to 1,245,684.45 EUR (the week before it was 1,241,245.04 EUR). Although the turnover numbers are approximately the same, this week the activity in Main-list was twice the previous week’s. The leader in turnover was SAF Tehnika (SAF1R) with 470,530.75 EUR and 11 deals. That was nearly a half of Main-list’s total turnover. The OMXR index declined 1.18% this week, while BALTIX index dropped 1.28% during the same period. The decline was leaded by Grindeks (GRD1R) with -2.86% and Latvijas Gaze (GZE1R) with -1.64%. Only three stocks increased in price this week from which only Ditton pievadkezu rupnica (DPK1R) managed to achieve more than one percent gain (+1.14%).
SAF Tehnika (SAF1R) was the leader in turnover this week; however, the price didn’t make a significant movement and during the entire week declined by 0.43%. Year 2005 was not successful for SAF1R whatsoever as share dropped 23.62% of its value. The beginning of 2006 hasn’t been good either. Up to this point it is difficult to see any factors which could make the stock increase in price.
Pharmaceutical company Grindeks (GRD1R) experienced the biggest decrease in share price from all companies listed on Main-list and I-list. After astonishing performance in 2005 by gaining +91.67%, the stock dropped 2.86% during this week. The extraordinary shareholders meeting and the re-election of Council members might have made some impact on that, as well as information that one of the insiders Janis Naglis has sold all his share in the company (286 195 shares in total). However, it might be too early to dump the stock as long term prospects of the company still remain good. Unless correction in overall market takes place the price of the share is expected to perform bullish in the future as well.
The price of Latvijas Gaze (GZE1R) shares declined -1.64% after another unsuccessful attempt to break through 11.00 LVL (15.70 EUR) resistance level and now trades around 10.80 LVL (15.37 EUR). The beginning or the year for GZE1R shares was quite optimistic as the price increased by approximately 10% on speculations about anticipated changes in natural gas tariffs in 2007. However, it seems that these news have deplenished its short term potential and further rally will require some other stimulus.
Ditton pievadkezu rupnica (DPK1R) was the only company whose share’s price managed to gain more than one percent (+1.14%) during this week. Most likely there are no fundamental reasons behind that as no new information was issued concerning the company during the last couple of weeks. And as there are no fundamental reasons, there could be technical. An argument for that could be the fact that since November 2005 the price of the stock trades in channel between 1.25 EUR and 1.35 EUR levels. Thus, this week’s increase could be described as rebound from 1.25 EUR support level. In general DPK1R might be a relatively good bargain for long position with short term target of 1.35 EUR.
It is difficult now to forecast any further actions in RSE as share prices are beginning to stumble. It might be a sign on upcoming correction as well as just a flat period before the further rally. The most reasonable option now would be to become a bit more conservative and wait for some more clues.
By Niklavs Zemzaris
