RSE (Riga) - Latvian Stock Market Overview

The first week of the last month of the year has ended, and we can say – what a week it was for the Riga Stock Exchange (RSE)! For a long time there hasn’t been a week like this, when no companies end up with an increase in their stock value. The Baltic Benchmark GI (OMXBBGI) index decreased by 4.56% during the week. Not surprisingly, the OMX Riga (OMXR) also declined. It decreased by 35.05 points, or 11.12%, and was the biggest decline comparing to the other two Baltic countries. The total turnover of the main list was 85,676.99 EUR, and it was a 23.99% fall compared to the last week of November. Nevertheless, the number of deals involving companies in the main list increased by more than a quarter and amounted to 245. As already mentioned, there were no winners this week. This means that all the companies on the main list - Grindeks (GRD1R), Latvijas Kuģniecība (LSC1R), Ventspils Nafta (VNF1R), Olainfarm (OLF1R), and SAF Tehnika (SAF1R) – experienced a decline in their stock values. 

All the companies on the second list, except Rīgas Farmaceitiskā Fabrika (FRM1R), whose stock value remained the same, because there were no deals made involving this company, experienced a decrease as well. A remarkable decline was met by Latvijas Gāze (GZE1R), the only carrier and operator of natural gas in Latvia. Its stock value decreased by 143 points or 18.3%. It is a significant decline after a rather stable second part of November and can be explained by the fact that the latest news revealed that the company has operated with a loss of 280,000.00 LVL for the last nine months. The company explained this loss by the unnaturally high temperature during the first quarter of the year, during which people consumed less gas than usually. Also the new tariffs of the gas were implemented only on October 1, which means that from May till October the old tariffs didn’t cover the costs of purchasing this gas. In the future the stock value of Latvijas Gāze should stabilize as despite the loss, the company has managed to increase their revenues by 47.3% (http://diena.lv/lat/business/ hotnews/fuel/latvijas-gazes- zaudejumi-devinos-menesos-ls- 280-000) 

During this week the stock value of Grindeks (GRD1R), Latvian pharmaceutical company, decreased only by 16 points or 3.6%, which is the least decrease from all the companies in the main list. Although the turnover of this company declined by 42.1%, it still made 31.14% of the total turnover of the main list and is the biggest among all the main companies. Moreover this week Grindeks received The Baltic Market Awards prize for the best relationships with the investors on the Internet. Therefore this slight decrease can signalize for a possible growth in the future. 

The second least loser of the main list was Latvijas Kuģniecība (LSC1R), Latvian shipping company, whose stock value decreased by 11.82% or just 13 points. It’s a decrease for the fourth week in a row and can be explained by the reduction in the oil prices, which results in lower amounts of shipping. The turnover of the company decreased only by 7.2% during the week, and as the profits of this company for the first nine months of 2008 were more than EUR 45 million, the stock value of Latvijas Kuģniecība should stabilize and increase in the near future. 
 

The graph of Latvijas Kuģniecība stock value from November 1 till December 5