OMX Tallinn again had a very steady week and added 2.35% w/w. New one- year highs are pushing the index and showing that there could be some more room to climb.
Swedbank Equity Weekly: stocks reaching 52-week highs
16th March 2013, 10:37
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Investors are actively buying Olympic (+1.57% w/w) and Tallink (+4.60% w/w) and there has been increased interest in many other names across the board. Tallink peaked at over EUR 1.00 per share on Thursday and climbed up to EUR 1.04 by the end of the week. Investors are hoping for a potential upcoming dividend announcement. Sentiment around Olympic has been also overly positive and the stock is trading at its 52-week high. Turnover was much stronger across the board w/w, with Tallink (EUR 1.50m) being the strongest.
Macro news
According to the updated national accounts published by Statistics Estonia, the GDP grew by 3.7% y/y in the 4th quarter of 2012 and working-day adjusted GDP by 0.9% q/q. The annual GDP growth in 2012 was 3.2%. Looking forward we see deceleration in government investments and modest growth in corporate investments. The growth in domestic demand should decelerate as well, but import will continue to grow faster than export in the near future. Private consumption will contribute the most to the domestic demand. Economic growth will decelerate in the first half of 2013.
Although economic growth in Estonia has depended significantly on foreign trade, the contribution of exports to GDP growth has fluctuated. However, as export growth fell already at the end of 2011, the contribution of domestic demand to GDP growth started to dominate. Since last September, exports of manufacturing output have risen, contributing to growth mainly through the acceleration of exports of computers and electronic products. Seventy-one percent of manufacturing sales are exported. The share of intermediate goods in exports is decreasing, while that of capital goods is growing. We expect a more broad-based improvement in exports in the second half of 2013. Unit labour costs are, however, picking up, as a result of both growth in labour costs and a deceleration in labour productivity. According to preliminary estimates, the growth of unit labour costs against our main trading partners is not expected to slow in 2013, owing to the worsening price competitiveness. Still, a weakening euro exchange rate against SEK, RUB and USD will have a positive influence on our export prices and cost competitiveness.