RSE (Riga) Market Overviews
Latvian Stock Market Overview20/02/2006 – 24/02/2006
This week in terms of activity was quite active in the RSE. The total weekly turnover amounted to 2,022,964.28 EUR (the week before it was 1,506,973.18 EUR). The weekly turnover of more than 2 million is quite rare in the RSE, as it amounts on average around 1.4 million. The leader in turnover was Grindeks (GRD1R) with 792,828.82 EUR and 67 deals, which was more than a half of the Main-list’s total turnover. Grindeks also was the top gainer this week with +7.89%. Despite the good performance of GRD1R the OMXR index declined 2.38% this week, while BALTIX index dropped just 2.07% during the same period. The decline was leaded by Venspils Nafta (VNF1R) with -9.20% and Latvijas Kugnieciba (LSC1R) with -5.22%.
Grindeks (GRD1R) was the leader in turnover this week as well as in the price increase (+7.89%). After almost 17% drop in the price in 2006 it seems that stock has become undervalued in the eyes of market participants and they are picking it up now. Company’s un-audited financial report for 2005 was issued on 21.02.2006 according to which in 2005 net profit of Grindex was 6,424,225 EUR (it’s almost 3 million more than in 2004!). The price might consolidate around 8.75 EUR level for some time. Next robust upward movement is expected in case of braking through 9 EUR level.
The share price of Latvijas Gaze (GZE1R) this week increased by 1,85% which was the second largest increase among Main-list and I-list emitents. So far Latvijas Gaze is the top performer of 2006 although the increase is not very impressive +3.02%. At the same time OMXR index has dropped by 8.19%.
Venspils Nafta (VNF1R) is very volatile during last few weeks. The previous week it was top gainer (+5.04%); this week it is top loser (-9.20%). Such a significant one week’s decline could not be without the reason; however, it is difficult to say it now as no official fundamental data were issued. It might be because of anticipations about upcoming un-audited financial report of 2005.
It is not expected for the prices to significantly advance during the upcoming weeks. Most likely next week’s price trading ranges could be quite flat. Traders with high risk tolerance could start accumulating RSE stocks, but the most reasonable short term strategy would be to stay neutral and wait for whether a confirmation of further decline or resuming of bull market.
By Niklavs Zemzaris
