Riga Stock Exchange Group profit in 2002 is 259 thousand lats

06.03.2003 RIG

Riga Stock Exchange and Latvian Central Depository consolidated group turnover in 2002 amounted to LVL 1,446,439 (EUR 2,371,211). Share capital at the end of the year was LVL 893,364 (EUR 1,464,533). The Group closed the year with a LVL 259,020 (EUR 424,623) profit before taxes. The past year was the first when the RSE and the LCD worked as for-profit companies. We can note with satisfaction that the financial performance has been a success. The RSE profit before tax was LVL 192,638 (EUR 315,800), which is all-times best performance in the company history, and resulted in equity increase by 30%. Revenues from privatisation services traditionally generated the largest share of all revenues. LCD, despite of the fact that the fees for key services were reduced by 20%, and material investments were made in developing pension account custody system, the LCD closed the year with a LVL 34,835 (EUR 57,106) profit before taxes.
It is no doubt that radical changes in the RSE and the LCD shareholder structure was the central event. As a result, HEX Group (Finland) became the Riga Stock Exchange major shareholder (92.98%), while the RSE acquired 100% of the Latvian Central Depository shares.

“Both steps are going to have an effect on the future of the Latvian capital market, and are of great importance for both companies. Integration with HEX is one of the key strategic objectives for 2003, allowing to set up, in long-term, a seamlessly functioning, safe and internationally recognised marketplace. At the same time, the RSE and the LCD integration will allow cost savings and provide one-stop services to the clients. In the future the Group expects to be able to offer to its clients new, more efficient and, what is most important, less expensive services,” said Guntars Kokorevics, President of the Riga Stock Exchange.

In order to enable the Latvian investors to keep the securities in their accounts in Latvia, the LCD established corresponding relations with Euroclear. Non-competitive government bond primary placement auctions on the LCD system, started late last year, make these securities accessible to a broader investor base: apart from banks, brokerage houses may participate as well – either in own or on clients’ account. Co-operation with State Social Insurance Agency in the area of operating state funded pension system participants’ accounts will continue to be of significance this year as well. The accomplishments of 2002 allow us to face the years to come with optimism. A successful Group budget has been prepared, aimed at profit making and seeking for new technological solutions for enhancing the Group operations and making them more efficient. HEX Group, the new shareholders, is willing to develop the domestic capital market and is prepared to invest cash, know-how in infrastructure development and in human resource training. “Our priorities for 2003 are to consolidate the RSE and LCD as a Group and to integrate into the HEX Group, to enhance the trading activity via attracting new high quality issuers; and to develop new services and to market them more actively”, stated Guntars Kokorevics.