RSE (Riga) Market Overviews

Latvian Stock Market Overview
31/10/2005 – 04/11/2005

This week the turnover increased and amounted to 1 972 003.32 EUR. The OMX Riga index rose sharply by 4.21% while the BALTIX index went up slightly by 1.55%. The turnover leader was Latvijas Kuģniecība (LSC1R) with 675 293.14 EUR and 235 deals. The top gainer in share value was Latvijas Balzams (BAL1R) with an increase of 12.62%; however, Olainfarm (OLF1R) was close with a 10.71% increase. Liepājas Metalurgs (LME1R) was the only one which share value went down – it decreased by 4.59%.

The decline in share value of Liepājas Metalurgs (LME1R) was largely caused by announcement of financial results of operations during the first 9 months of 2005. It revealed three times lower profit in comparison to the same period of 2004, although the turnover had increased by 2%. This was explained by 12.9% increase in price of the main inputs - raw materials, in combination with a decrease in selling price of products by 2.5%.

The soaring of the price of Latvijas Balzams (BAL1R) shares to 5.21 EUR per share may be due to continuous effect of the last week’s announcement. Latvijas Balzams announced that it had won the rights to supply vodka to Norway’s state liquor monopoly Vinmonopolet. Customers may be willing to buy the shares since this information indicates possible growth and increase in profits in future.

Latvijas Gāze (GZE1R) experienced a rise in share price by 5.77%. One factor that influenced the share price may be the unofficial information from the European Commission that it had ended the violation procedures concerned with monopoly of Latvijas Gāze. According to EU directives, starting with 01.07.2005 industrial manufacturers in Latvia should have been able to choose among at least two different natural gas suppliers, which was not achieved.

The share price of Rīgas Transporta flote (RTF1R) remained constant, while the turnover was the 2nd largest with 252 696.23 LVL and 78 deals. This was probably because Lavinia Corporation, which now indirectly owns 85.35% shares of Rīgas Trnsporta flote, made an offer on the 1st of November to buy Rīgas Transporta flote shares for 0.96 LVL per share. The offer is in force for 50 days until the 21st of December.

Finally, yet another piece of information comes from the government of Latvia. On Tuesday an announcement was made about plans to sell the state’s 38.6% stake in Ventspils Nafta (VNF1R) . This seems to have affected the company’s share price which increased by 2.99% last week.


By Artūrs Kaņepājs
Viktors Ivanovs