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Sentiment in the Baltics remains rather mixed and seems to be keeping many investors on the sidelines. In recent weeks, activity has declined, but a few block trades indicate ongoing interest.
Swedbank: Tallinn equity weekly
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16th February 2013, 11:27
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OMX Tallinn (-0.10%) started the week on the downside, but Merko's impressive quarterly report lifted the index. The first half of the week was somewhat negative, with Nordecon weighing on the index the most.
After the publication of its weaker than expected Q4 report, the Nordecon share price fell by 4.83% during the week. Arco Vara (-7.35%) continues to follow its negative trend, with the share price struggling to stay above EUR 1.00. As mentioned above, Merko topped profit forecasts, and its share price rose by 9.53% w/w. The most active stocks during the week were Tallink and Olympic, which generated EUR 3.0m in turnover
Macro news
According to the flash estimates published by Statistics Estonia, the GDP growth in Estonia accelerated from 3.5% in the 3rd quarter to 3.7% in the 4th quarter. The annual GDP growth in 2012 was 3.2% and the seasonally and working-day adjusted GDP increased by 0.9% compared to the 3rd quarter. The growth rate overshot our expectations. Increase in domestic demand should moderate together with the deceleration of the growth of investments. As export of goods will not be broad-based in the coming months, the GDP growth should decelerate in the beginning of current year.
According to Statistics Estonia, the unemployment rate decreased from 12.5% in 2011 to 10.2% in 2012 which was the lowest of the last four years. Unemployment rate in the 4th quarter of 2012 decreased to 9.3% from 9.7% in the 3rd quarter. Although unemployment rate decreased for the third quarter in a row, the growth of employment has decelerated and due to the labour deficit it will likely decelerate even further. Unemployment rate has reached close to its natural level and will stay that way for this year as well.