RSE (Riga) Market Overviews
Latvian Stock Market Overview20/03/2006 – 24/03/2006
This week RSE experienced a new record high trading activity of 3,138,176.33 EUR, thus, improving previous week’s already impressive volume of 2,562,060.79 EUR. Knowing that during all the second half of 2005 and the beginning of 2006 this figure fluctuated around 1.7 million, such a turn can’t be treated with indifference. More than one third (1,365,573.82 EUR) of this number came from Latvijas Kugnieciba (LSC1R) which was not only undoubted leader in turnover this week but also gained nice 13.83% in share’s price. The best performing stock, however, was Ditton pievadkezu rupnica (DPK1R) with weekly advance in price of 17.24%. In general this was quite optimistic week in RSE as there were no declining stocks. The worst performer of the week was Rigas Kugu Buvetava (RKB1R) which didn’t change in price; all other stocks experienced positive gains. The OMX Riga index advanced 30.37 points during the overview period. In percentage terms that is 5.28% - much more than price index increase in the neighbor stock exchanges (+1.63% in Tallinn and +2.90% in Vilnius) during the same period.
Latvijas Kugnieciba (LSC1R) was the leader in turnover this week by providing more than one third of the total weekly trading volume and more than one half from the Main list’s volume. The price increased by 13.83% from 1.34 EUR to 1.52 EUR per share, however the price is still well bellow the level of 1.85 EUR where it was in the beginning of the 2006.
Ditton pievadkezu rupnica (DPK1R), manufacturer of vehicle components, was the leader in share’s price increase during the overview period. The price jumped from 0.83 EUR to 0.97 EUR per share which is +17.24%. It can’t be explained by some kind of positive fundamental data. The real reason might be that the price of the share has experienced the largest drop since the beginning of the year, thus it required also the largest rebound. Actually, even after this impressive one week’s price increase the share is still the biggest loser of the year 2006 so far with -27.66%.
The trading of the shares of Latvijas Gaze (GZE1R) was suspended before the Public Utilities Commission’s announcement on the issue of the new gas tariffs. It was resumed again on the 22nd of March. As the announcement was positive for Latvijas Gaze (GZE1R) the share’s price increased by 9.04% during the rest of the week and now is 14.58 EUR per share. The good news for the company is that next year they will also be allowed to increase the gas tariffs even more.
Olainfarm (OLF1R) – number 3 in terms of price advance this week (+16.77%) announced about receiving rights to supply one of its products (Remantdatin) to Norway for creation of governmental reserves in case of flu pandemic. The price at the end of the week reached 2.77 EUR per share.
Rigas Kugu Buvetava (RKB1R) could definitely be called the most passive stock of the week. There were no movement in price – it stayed at 1.39 EUR level during the entire week. What is more, it was also the share with the lowest turnover (just 2,819.65 EUR). If the overall this week’s optimism in the RSE couldn’t pull up the share’s price then it is really hard to imagine what could do that.
The opinion expressed in the previous overviews about not buying RSE stocks heavily and better being careful was correct as stocks are still heading lower in comparison where they were in the beginning of 2006. Thus, we still have to be careful about this week’s advance and high turnover as it’s too early to conclude that bull market is going to resume upward movement. More likely it is expected that stocks will drop as some of the investors will try to fix their profits and new participants won’t be attracted in order to keep prices advancing or at least stable.
By Niklavs Zemzaris
