VSE (Vilnius) - Lithuanian Stock Market Overview

Isaac Newtonian should be happy about the Vilnius Stock Market, which clearly represents the theory of gravitation. This week was not an exception with a creepy decrease of 10.39 percent to 201.33 points. On Friday the European economist officially announced that the Euro zone has slipped into recession. The fears of it nearly have come true in the “European Tigers” as well. The stock market is the first to be hit, because it clearly illustrates the future expectations. This week was the catastrophe for the financial sector. Ūkio bankas (UKB1L), Bankas Snoras (SRS1L) and DnB NORD Bankas (NDL1L) plummeted drastically by 39.45, 38.46 and 28.93 percent respectively. Although nowadays the 0 percent change could be regarded as a huge achievement, the most “greeny” company was Klaipėdos jūrų krovinių kompanija (KJK1L) with admirable increase of 6.17 percents to 3.39 EUR followed by Lietuvos energija (LEN1L) (showing a gain of 3.7 percent to 0.81 EUR). The total weekly turnover was 16,247,258.22 EUR. 

The most exciting news of the week was released by the company that does not have both opening and closing prices or the ticker. Well, yet. The chain of public food restaurants “Čili Holdings“ has officially announced about the plans to join the Vilnius Stock Market. The plans are transferred to the near future (2-3 years) due to overall economic situation and the objective to expand the company internationally (mainly to Latvia, Russia). “Čili Holdings“ now owns 57 public food catering places in Lithuania, 17 in Latvia, 2 in Ukraine, 1 in Estonia and 1 in Saint Petersburg. It would become the first food catering company joining the Vilnius Stock Market and will definitely draw a huge attention.  

Even though Ūkio Bankas (UKB1L) is one of the most attention attracting company in Vilnius Stock Exchange, we haven‘t talked much about its weekly performances in  Investment Game‘09 market overviews. However, this week we could have seen dramatic changes in the value of this index, so it‘s time to talk a bit more about this equity. Almost nobody could have thought that Ūkio Bankas (UKB1L) share price could drop below the line of 1.00 LT (0.29 EUR), however already on Tuesday this happened, and the value of one share became 0.27 EUR, marking the loss of 10.58 % in just one day. This happened even after the official announcement on unaudited net profit of ten months of year 2008. The announcement shows 25.7% increase in profit compared to the same period of previous year. However, most investors were familiar with the revenues received by company for the sale of Real Estate project that clearly makes the profit less than expected, so they didn‘t catch the hook and kept selling their shares in the following days. As a result, even after optimistic trend appeared in the European stock markets on Friday, UKB1L index price ended the trading week with a decrease by 7.04 % on the last day marking the price tag at 0.19 EUR. Ūkio Bankas (UKB1L) was intended to release a new emission of shares in the end of the year 2008, however executive board of this company also considers the price of the share too low and the chances that new emission will be releases are very low. Everyone is looking forward to the better times. 

Alcohol producers as well as the banking sector experiences a lot of problems these days. Increase in the excise taxes has lead to quite significant drop in the sales of strong alcoholic beverages. Stumbras (STU1L) at the end of last month has announced that it will stop the production during the winter holiday season. However, this week official announcement on Stumbras (STU1L) sales for the first ten months of 2008 was released and even though it showed a decrease in sales during October compared to last year, sales in the first ten months of 2008 were slightly higher than in the same period last year (0.47 % increase). Maybe it will help investors to feel a bit more positive about this share on Monday after quite substantial price drop by 17.08 % from 1.39 EUR to 1.15 EUR this week, even though this stock was traded just in the first three days of the week. 

Now it is the time to see if the predictions, which were suggested two weeks ago, will come true. As the OMXV index dropped heavily, there is one sign, which gives some hope. After a weekly long way down, the trend, as predicted, stopped at 201.136 points, forming a nice hint of support.