Estonian securities market in the first quarter of 2007

09.04.2007 TLN

In the first quarter of this year, Tallinn Pharmaceutical Plant left the investors list of the stock exchange and AS Ekspress Grupp successfully conducted the initial public offer of shares. Since the beginning of the year, a new member JSC FBC Jusu Tarpininkas has been added to Tallinn Stock Exchange, the company is also the 16th joint member of Baltic stock exchanges. Trading activity was started by external member Nordnet, which despite its membership in Baltic stock exchanges has been in a passive status until now.

OMX, Tallinn Stock Exchange index, continued to hit the current records and at the beginning of February, rose to the highest level throughout the exchange history – 1043.29 points. The record level was followed by a fall and stabilisation at 897.61 points at the end of March. OMX Baltic Benchmark (OMXBBGI), the Baltic comparison index, increased 4% within a quarter reaching 882.44 points at the beginning of February and balancing at 779.35 points at the end of March.

“The growth in the stock exchange which started in October 2006, developed into too high a level by the beginning of this year and led to the wish among many investors to withdraw the quickly earned profit from the stock exchange. The resultant adjustment had an overall healthy impact on the market reminding investors of risks related to the securities market and of a need to reasonably assess and disperse the risks,” commented Kalle Viks, Managing Director of Tallinn Stock Exchange.

In the first quarter, the number of stock exchange transactions increased by 292.86% (50,891 transactions compared to 12,954 transactions in the same period of 2006) and the turnover on the stock exchange was 335 million euros. The share of private persons in stock exchange transactions has increased, as shown by the decrease of an average stock exchange transaction by almost 45% (an average stock exchange transaction in the first quarter of 2007 was 6583 euros and 12,182 euros in 2006).

Internal trade in the Baltic States has been significantly more active for two years. A total of 3 634 cross-border securities transfers were made between Estonia and Latvia in the first quarter of 2007 (4 703 in 2006). In the same time period, 21,996 securities transfers were made between Estonia and Lithuania, which outnumbers the total in 2006 (21,309).

A growth in the investment interest among Estonians is proved by continuous placement of money in funds. The amount of investment funds registered in the Estonian Central Depository for Securities at of the end of the first quarter of 2007 was 646 million euros, of which the investments of private persons comprised 169 million euros. The number of private persons who have invested in funds increased on average by 1000 persons a month. By the end of the first quarter of 2007, 17,762 persons have invested in funds.

“The increasing share of private persons in stock exchange transactions and their continuing active investment in funds show that private investors continue to have interest and means also for securities investments. The implementation of a new coalition agreement should make saving more appealing in the future, as it is intended to amend the Income Tax Act so that legal and natural persons will be treated equally upon taxation of profit earned on securities investments,” said Kristel Johanson, Managing Director of the Estonian Central Depository for Securities.

As of the end of the first quarter, 6 384 companies were registered in the Estonian Central Depository for Securities. If the number of public limited companies being registered dropped a little compared to the previous year, the registration of private limited company is more vigorous than in 2006 (a growth of almost 30% compared to the same period in the previous year). As of the end of March, 1263 private limited companies have been registered in the central depositary. The value of securities registered in the Estonian Central Depository for Securities comprised more than 9.5 billion euros in total.

Read more: Baltic Bulletins, OMX Exchange monthly statistical report.