Tallinn Stock Exchange: last year broke records

06.01.2005 TLN

Press release of the Tallinn Stock Exchange
04.01.2005

The year 2004 was one of many records and changes for the Tallinn Stock Exchange. The TALSE index rose to 448.82 points over the year (annual growth 57.1%), which is the largest annual growth since the exchange fall of 1998. A common market of the Baltic states was launched with the new trading system introduced in September. Computation of the Baltic securities market index BALTIX began, which reached 421.01 points by the turn of the year (annual growth 40.2%).

“We hope that the investments made last year in infrastructure and in changing the regulative environment will result in an increased trading and listing activity in the years to come. We will probably see foreign members of the stock exchange outnumber the domestic members already in the middle of next year,” said Jaanus Erlemann, the managing director of the Tallinn Stock Exchange to sum up the year.

The SAXESS trading system introduced in Tallinn, Riga and Helsinki last year has been a success. The differences between the markets have decreased substantially and investing in the Baltic securities markets has become simpler and cheaper. The Lithuanian stock exchange will join the SAXESS system in 2005.

Together with the new trading system, the facilities of the settlement link between the Estonian and Latvian depositories were renewed and this increased the number of cross-border securities transactions. During the last calendar quarter of 2004 alone, 262 cross-border transactions were made.

The market value of the TSE listed companies increased by 52% to 4.59 billion EUR and the share prices of many companies broke new records. Owing to the rapid increase in market values, the turnover velocity which indicates market liquidity (turnover to market capitalisation ratio) decreased to 15% in 2004, compared to 17% in the previous period. Exchange turnover in Tallinn increased to 669 billion EUR in 2004.

The relative share of funds and other institutional investors in stock exchange trading continued to increase. This is demonstrated by the increase in the amount of the average stock exchange transaction, which was 33,391 EUR in 2004 (growth 49.5%).

“Estonia’s accession to the EU and the changes in the market structure have further increased to the trust of foreign investors in the Estonian securities market. Four new foreign members from the Scandinavian countries and Latvia joined the TSE last year,” added Mr Erlemann.

Private individuals’ investments in funds continued to grow rapidly for the third consecutive year (annual growth 54%), accounting for a quarter of the total value of the funds. Investment funds totalled 278 million EUR at the end of the year. 6640 private individuals had holdings in funds at the end of 2004, that is 38% more than a year ago.

The year 2004 was a year of continued growth of the bond market for the TSE; the bonds of three new companies were listed and one bond was delisted. The bond market increased by 86.1% over the year in terms of market value.

A statistical overview of the OMX markets (Sweden, Finland, Estonia, Latvia, Lithuania) for 2004 is available at www.ee.omxgroup.com under About securities market -> Publications -> OMX markets’ monthly statistics. The overview is in English.

Main statistical indicators of the Estonian securities market (pdf)