RSE (Riga) - Latvian Stock Market overview

Latvian Stock Market Overview (RSE)

20/10/2008 – 24/10/2008

      As the world financial crisis continues, the situation in the Baltic stock market becomes worse. This week the OMX Baltic Benchmark GI (OMXBBGI) index experienced a 12.41% decrease. Nevertheless, OMX Riga (OMXR) index increased by 1.48% after a 1.67% increase last week. Compared to other Baltic countries’ stock markets, it was the only one to experience an increase. This makes the Latvian Stock Market quite attractive to potential investors. The total turnover of the main list this week was 381,992.76 EUR. Comparing to the previous week it increased by 10.4%. The number of deals made was 381, which means that there had been a decrease of 118 in comparison to the week from 13^th till 17^th of October. There were two companies on the main list whose stock value rose this week - Ventspils Nafta (VNF1R) and Latvijas Kuģniecība (LSC1R). On the contrary, Olainfarm (OLF1R), SAF Tehnika (SAF1R) and Grindeks (GRD1R) did not have such a successful week. 

      It seems that Ventspils Nafta (VNF1R), the largest oil product transit service company in the Baltic region, is on a hot streak. For the second week in a row it has a large gain in its stock value. The value of the stock was 1.81 EUR at the start of the week and ended at 2.05 EUR on Friday. This means that this week it had an incredible 13.26% gain. In the last two weeks the value has increased from 1.71 EUR to 2.05 EUR per unit, which is almost 20%. This is with certainty a very positive aspect that makes the company attractive to investors. One of the possible reasons for such a gain is a change in the Supervisory Board, which was announced on 23^rd of October. After such two weeks, it is quite questionable whether the tendency is going to remain because of the overall situation in the Baltic Stock Market. On the other hand, the oil prices keep on falling, which affects the activities of Ventspils Nafta quite reasonably. Despite these facts, Ventspils Nafta still remains the most attractive company in the Latvian Stock Market at the present moment. 

      The second company that is worth having a look at is Latvijas Kuģniecība (LSC1R). Not only the fact that it experienced a huge increase of 16.84% to 1.11 EUR per unit, which by the way makes it the winner of the week. It also seems that it is starting to recover from the sharp fall in value that it experienced at the start of September, 2008. During September its value declined by almost one half. Nevertheless, it seems that it has acquired a positive tendency and the predictions for the future can surely be bright. The company was affected by the increasing oil prices, but now, when the oil prices in the world have decreased significantly, it can be expected that the value of stock is going to increase in the future. Hence, Latvijas Kuģniecība is undoubtedly one of the companies to keep an eye on. 

      One of the companies that faced a decline was SAF Tehnika (SAF1R). This week it was a decrease of 6 points, or 5.35%, in stock value. SAF Tehnika is one of the main list companies which has been affected by the financial crisis quite significantly. It has been facing a decrease in the stock value since mid-August, so the upcoming future doesn’t look so bright, too. In mid-August its value was around 1.50 EUR and from that time it has been decreasing. During the last quarter it has lost approximately one third of its value. Because of this fact, investors shouldn’t expect much of SAF Tehnika in the following weeks.