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Indices: / OMXR 0.00% / OMXV 0.00% / OMXT 0.00% / OMXS30 0.00% / OMXH25 0.00% / MICEX 0.00% Stocks: VTBR 0.00% / OMXV 0.00% / OMXR 0.00% / EEH1T 0.00% / GAZP 0.00% / VTBR 0.00% / OMXV 0.00% / OMXR 0.00% / EEH1T 0.00% / GAZP 0.00% Porfolios: StraterS 0.00% / koncik 0.00% / Laime 0.00% / Life 0.00% / RIX 0.00%
Latvian Stock Market Overview 12/03/2007 – 16/03/2007
This weak continued the trend of downward going total turnover, and showed other signs of being more passive and some signals for lack of trust in the stock market. To start with, the total turnover plummetted by 1.2 Million EUR and reached shy 597 971 EUR. Here we have to note that it was more than 3 Million EUR just 3 weeks ago. As a consequence, almost all enterprises continued the downward sloping trend of reduction in share price value (which continues for already third week) except for 2, which showed a slight increase. As a result both major indices Baltix and OMX Riga showed a decrease of 2.02% and 2.53% respectively.
The largest gainer in this week was Olainfarm(OLF1R), which managed to scrape a nominal increase of 1% in stock price value reaching EUR 3.9. Nevertheless, this increase is not justified, but it is the end result of deals made about this company. The investors about this company showed large activity in terms of deals and total turnover (EUR 67 250), which contributes to a large part of total turnover in this week. Yet, we could believe that some part of stock price increase could be associated with the huge PR campaign launched in the press by Olainfarm to gain new employees and stimulate students to work in the medicinical pharmacy. However, such effects most likely are very temporary, yet given the fact that Olainfarm stock prices has stopped rising during last two months, we can believe that some sort of current equilibrium is achieved. Thus we recommend medium buy for this company.
Again Ditton pievadkezu rupnica(DPK1R) has shown a significan decrease of 8.3% reaching EUR 0.55 and during this week it was the largest one. To contrast with this week's winner, DPK1R has only second largest number of deals and not so impressive turnover. Nevertheless, it still has added to some contribution for share price decrease. As some months before, DPK1R administration is lacking the willingness to pursue informative field and inform public about its state. The lack of information, definately fostered the lack of confidence in this enterprise. Similarly, it is fostered by investors belief that this enterprise will continue to go even lower, because for last 2 months DPK1R has done so. Thus we suggest somewhat strong sell, unless some major changes appear, because this enterprise has managed to show the most dramatic changes in its share value.
This trend could be a major concern for all investors as it might imply a further lack of confidence and even a further decrease of prices for the stock market, thus creating a self-fulfilling expectation. In this manner, it should be reasonable to expect that some major company would make some announcement on the market to ease it and restore true value of share prices. Nevertheless, we should not forget the fact that Riga stock market is relatively small and calm, thus such periods of inactivity and reduction might occur.
By Natalja Avramenko
Aleksandrs Graholskis
Juris Rumba
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