RSE (Riga) Market Overviews

Latvian Stock Market Overview
13/03/2006 – 17/03/2006

This week the share prices of all companies, except for the price of Rigas Transporta Flote (RT1F) shares that has not changed, continued to decrease steadily. As a result, the OMXR index went down by 3.84%, and BALTIX index decreased by 1.76%. The total turnover went up slightly in comparison to the previous week and amounted to 2 562 060,79 EUR. Latvijas Kugnieciba (LK1R) was the leader in turnover with 608 402,78 EUR while the price of its shares decreased by 4,08%.

Latvijas Balzams (BAL1R) share price experienced the most substantial decrease of 16.01% and amounted to 3,83 EUR per share. The primary reason for this decline could be the disappointment with the financial performance of the company. Financial report which was published on 1st of March revealed that expected results were exaggerated. Since the majority of companies have published their 12 month financial reports recently, it is also reasonable to suggest that the overall decrease in the share prices is mainly due to the fact that too high expectations about the financial results were not met. Currently, the activity of investors is not high and this also makes share prices go down. As to Latvijas Balzams, the decline in the price of its shares is expected to continue next week; however, it is unlikely that the price will proceed to fall so sharply since the turnover of the company is not very big which means that there is a possibility of price stabilization.

Another big loser of the week was Olainfarm (OLF1R); the price of its shares went down by 12,11%. This considerable decrease could be explained by the aforementioned disappointment of the investors with the financial performance of the company (Olainfarm published its 12 month financial report on 27th of February). The other reason could be the fact that The Ministry of Health got suspicious of Olainfarm and asked for an explanation why the company sells some of its medicine even more than 10 times cheaper in Russia. However, Olainfarm share price is not expected to decrease in such a sharp pattern in the next week. In addition to this, the quality of Olainfarm production has been recognized recently as the company took 3rd place in a competition “Made in Latvia”. This also can make Olainfarm share price recover in the nearest future.

Rigas Transporta Flote (RTF1R) share price did not change for the third week in a row, still amounting to 0,98 EUR per share. Probably, the stability of the company’s share price is due to the low activity in the stock market (only 7 deals with the turnover of 9 702 EUR) and to the continuous redemption of the shares from the market by the Board of Directors.


By Viktors Ivanovs