Tallinn exchange livelier

Photo: Tairo Lutter / Postimees

The six months’ turnover of the Tallinn stock exchange might suggest that the market has come out of hibernation after several years; however, the upturn is rather the result of extraordinary events than sustainable growth of trading activity.

Statistics puts half-year turnover at €144 million which is greatest since the first half-year of 2008 and greater than the annual turnover for 2012 and 2014. The bad news is that the lion’s share or more than a third of total turnover came from the share of entertainment group Olympic EG the takeover bid of which most shareholders accepted. Shares of major owners Armin Karu and Jaan Korpusov moved into the hands of venture capital fund Novalpina over the counter. The six months’ turnover of Olympic’s share was €53 million. The share was also actively traded last year when it made up 25 percent of total turnover.

Local investors hope that Port of Tallinn will fill the vacancy left by Olympic when it exits the exchange. The port’s market value is half a billion euros, while that of Olympic amounts to €289 million.

The share of Port of Tallinn was actively traded in the first days after the state company’s IPO. Trading was most active on June 13 when share turnover amounted to €6 million and the two following days that yielded turnovers of €2.7 million and €3.4 million respectively. Daily turnover has not exceeded €2 million after that but has hovered around €1.5 million. The total trading volume over 13 days came to €20 million and was good enough for third place.

The second most traded share of the half-year was Tallink on €22 million. Tallink issued a mysterious press release in late July last year that was interpreted as intent to sell. It was unclear what would be sold but the market speculated that the shipping company would pull out of the exchange in the wake of a beautiful takeover bid. The share price soared to €1,25, growing by more than a third on the news.

It was clear by late March that no transaction, whatever it had been, would come and the plan would be postponed for some time. Paavo Nõgene became the new CEO of the company tasked, according to members of the supervisory board, with boosting the share price.

Nine months of uncertainty and speculation had an invigorating effect on Tallink’s share. Barring a general upturn in market activity, it is unlikely Tallink’s share will remain as popular next year and the year after that. The company is planning a parallel listing on the Helsinki exchange, and because no additional shares will be issued, it is likely trading activity in Tallinn will suffer further.

Looking at share price and index trends, such a modest first half-year has not been seen for years. The index OMXT grew by 1.57 percent in six months. The last time results for the first half-year were so slow was in 2014 when the index shrank by 1.9 percent (annual drop of 7.7 percent). The Tallinn exchange turned 22 a month ago, and the index and its predecessor Talse have climbed a total of 9.6 percent in those years.

The index climbed for three months and fell also for three months during the first half of 2018.

Looking at individual shares, 11 managed to rise while four fell.

The year has been most successful for frozen fish and fish products manufacturer PRFoods. The company acquired two UK fish industries and a Finnish fish trader last year. Investors seem to believe these are good investments and remain hopeful as concerns the company’s plans for the future.

The growing share price is notable also because former board member of PRFoods’ subsidiary Vettel, Pekka Pentti Olavi Lahtinen, sold all of his shares (104,177) in May and June, with the transaction making up almost 10 percent of total trading volume of the share. CEO Indrek Kasela bought 17,175 shares.

The half-year’s poorest share was that of textile and clothing manufacturer Baltika price of which dropped to €0.208 yesterday. The share was last this cheap in February of 1999.