Banks act laid back as Swedish merger breaks down

The Baltic Times, TALLINN
By Kairi Kurm
Sept 27, 2001

Swedish banks Swedbank (ForeningsSparbanken) and SEB (Skandinaviska Enskilda Banken) broke off their merger plans on Sept. 19, ending speculation about the consequences for the Baltic states’ banking sector, which the merged bank would have dominated.

Swedbank is majority owner of Hansabank Group, which from its base in Estonia operates in all three Baltic countries. SEB meanwhile owns Estonia’s Uhispank, Latvia’s Unibanka and Lithuania’s Vilniaus Bankas.

If the merger had gone ahead either Hansapank or Eesti Uhispank, which together control 80 percent of Estonia’s banking market, would have been sold.

In Stockholm, SEB Chairman Jacob Wallenberg rejected the claim by European Commission regulators that forming the new bank would have damaged Sweden’s banking sector.

“We do not share that opinion,” said Wallenberg. “(This decision means) the conditions to build a large European bank from a Swedish basis no longer exist as the synergies would be lost through concessions.”

Veikko Maripuu, analyst at the brokerage firm Suprema, speculated that the deal may actually have been canceled because of disagreements over how to reapportion the Swedish banks’ shares.

“SEB’s shareholders had more to gain from the merger,” said Maripuu.

SEB was expected to make up 51.5 percent of the new Swedish bank and Swedbank 48.5 percent, but Swedbank’s financial results in 2001 were better and the shareholders wanted a higher stake in the new bank.” Swedbank’s revenues are less vulnerable to fluctuations in the market, added Maripuu.

SEB’s share price dropped 4.8 percent on the Stockholm stock exchange at the news, while Swedbank’s share price increased by 7 percent.

There is now speculation that SEB might look for a new partner, possibly Sampo of Finland.

In Tallinn, Ain Hanschmidt, president of Eesti Uhispank, professed delight at the decision, saying it would enable the continuation of normal work and preparation of next year’s budget.

“One of the banks would have had to be sold, but we didn’t know which one,” said Hanschmidt. “Clarity is always good news. We intend to increase our market share and work more effectively.”

Uhispank had not been involved in the merger talks and had thus incurred no costs, he added.

Uhispank’s relatively small 87 million kroon ($5.12 million) profit in the first six months of 2001, a tenth of Hansabank’s, was due to “extraordinary costs” in that period, said Hanschmidt. “The results were better than the previous year and our owners are satisfied.”

In Riga, Unibanka spokesman Haralds Burkovskis denied that the cancellation of the merger was bad news. “Latvia’s banking market will remain stable and balanced. We aim to be the leading financial services provider in Latvia, and as part of the SEB group, throughout the Baltic states.”

In Vilnius, Julius Niedvaras, president of Vilniaus Bankas, which is owned by SEB, echoed the relief of his counterparts to the North. “This is generally positive news for Vilniaus Bankas. It means we will conduct our business as usual and will not be involved in any kind of speculation or rumors about what might happen in the event of a merger,” he told The Baltic Times. He said the failure of the Swedbank-SEB merger had had the positive effect of increasing interest in the Lithuanian Agricultural Bank, which is currently undergoing privatization.

Hansapank’s chief executive Indrek Neivelt said the Hansabank group had retained its existing strategy during the period of the merger talks. “The decision to discontinue with the merger in Sweden will have no significant impact on the operations of Hansabank Group,” he said.

“The group will continue its everyday business activities in Estonia, Latvia and Lithuania. “

Juhani Seilenthal, head of Nordea Bank’s Estonia branch, was non-committal about rumors that Hansapank might have been sold to Nordea. “We are curious people, who keep our eyes open. I cannot say we would have rejected the offer.”

The news clarified Nordea’s objective of growing further in Estonia, he added.

According to another source, a German bank was looking to acquire an Estonian bank, probably Hansapank. The Bank of Estonia announced on Sept. 19 that Germany’s Norddeutsche Landesbank might open an office in Estonia in December 2001.

Janno Toots, public relations adviser at the Bank of Estonia, said the Estonian banking market continued to be stable and secure.

Aija Breiksa, spokeswoman for Latvia’s Finance and Capital Markets Commission, commented, “The merger would not have influenced the Latvian banking market greatly, as the combined market share of the two Latvian banks, Unibanka and Hansabanka, would have been 40 percent.”

Merging the two Swedish banks would have created Europe’s 25th largest bank, with 11 million clients and 3550 billion kroons in assets.

Source: http://www.baltictimes.com/news/articles/5505/

Estonia’s draft budget too optimistic

The Baltic Times, TALLINN
By Kairi Kurm
Sept 27, 2001

The Estonian government approved on Sept. 18 the state budget for 2002, the revenues and expenses of which total 33.44 billion kroons ($1.97 billion) – 12 percent more than this year’s budget.

The head of the Bank of Estonia, Vahur Kraft, warned that the government’s revenue projections were too optimistic.

“Even (Finance Minister) Siim Kallas himself has referred to this as an unreasonably big budget growth,” said Kraft. “I welcome a balanced budget, but the government should be ready to follow a political consensus, to exercise responsibility and to adopt a negative supplementary budget if necessary.”

He said the economic situation had changed since the budget was drawn up in August.

The Ministry of Finance predicts gross domestic product will increase by 5 percent in 2002 and consumer prices by 3.8 percent.

Madis Muller, adviser to the minister of finance, said there was no reason to revise the budget in the light of this month’s terrorist attacks in the United States, whose impact had been less than expected.

But Veikko Maripuu, analyst at the brokerage house Suprema warned, “Increasing revenues from extraordinary sources in the present economic blaze doesn’t look clever.”

The government is planning to fill the budget with 700 million kroons in extraordinary revenue from the Huvitusfond compensation fund, a state-run financial organization which issues fixed-term bonds to be purchased initially with privatization vouchers, issued to Estonians following the restoration of the country’s independence.

Maripuu said the government was increasing the budget in order to fulfill promises made at the last general election in order to pull itself back from defeat at the next election. It was a tactic which had not helped the Estonian Coalition Party prior to the last election, he observed.

He said spending on health care, with a budget of 507 million kroons, and pensions would represent the biggest expenditure areas, while spending on defense and education would also increase significantly.

At the Finance Ministry, Muller highlighted the need to meet NATO requirements and increase the defense spending to 2 percent of GDP. Defense spending in 2001 is expected to equal 1.8 percent of GDP.

“There are a number of things we couldn’t afford this time,” said Muller. “The Ministry of Social Affairs, for example, wanted to increase monthly child support to 300 kroons. The government has decided to increase the monthly child support payments for second born children from 225 kroons to 300 kroons, which will cost the state 79 million kroons, but to leave support for a first child unchanged at 155 kroons. Increasing the latter would cost an additional 281 million kroons.”

According to Muller the government has decided to increase teachers’ salaries by 200 million kroons and support the development of enterprises and agriculture by 79 million kroons.

In addition to an expected 33.45 billion kroons in revenue from regular sources, the state will receive 1.2 billion kroons in foreign aid from the European Union under the PHARE, SAPARD and ISPA programs, which will not be included in the 2002 budget.

Compared to the previous budget the state also expects an increase in dividends: an additional 100 million kroons from the seaport Tallinna Sadam, 37.5 million kroons from ground telecommunications company Eesti Telekom and 23 million kroons from the postal office Eesti Post. Eesti Pank is expected to bring in 50 million kroons of additional revenue to the state budget.

“It’s a pity that the budget is so tense we can’t decrease taxes this time. It should be easier in the coming years. We’re planning to decrease personal income tax and increase the free-allowance tax to the same level as the minimum living wage,” said Muller.

The draft budget will be discussed in Parliament at the beginning of October.

Source: http://www.baltictimes.com/news/articles/5508/

Foreign visitors spend more time in Estonia

The Baltic Times, TALLINN
By Kairi Kurm
Sept 27, 2001

Many Estonians will be pleased by the latest statistics from the Estonian Tourist Board, which suggest a decrease in the number of one-day shopping visitors from Finland. Visitors instead spend more time traveling around the country.In the first seven months of this year 1.94 million foreigners visited Estonia, of whom one in four stayed in commercial accommodation.

Piret Kallas, project manager for tourism research at the tourist board, said the number of visitors staying overnight had increased by 13 percent and the length of their trips had increased by 17 percent although the number of tourists had increased by just 0.3 percent.

The Baltic Times asked several of those involved what lies ahead for Estonia’s tourist industry.

Torbjorn Bodin, general manager of the Radisson SAS hotel, said the company’s new hotel had not, as feared, pinched clients from competing hotels but had increased the amount of time visitors stayed in Estonia.

But Sigre Tompel, sales and marketing director at Domina Hotels and Resorts, said most hotels have suffered a downturn in 2001 as a result of changes in the sector.

According to the tourist board’s statistics a foreign visitor spends an average of 1.6 nights staying in paid accommodation. Preliminary balance-of-payment statistics show that Estonia’s revenue from tourism increased by 5 percent during the first half of 2001, amounting to 5.2 billion kroons ($ 306 million).

Tallinn Mayor Tonis Palts says tourism is not just economically important in its own right. It has a positive effect on other sectors, he said. He estimated that 1 million more tourists in Tallinn yearly would create 13,000 new jobs and half a million more tourists would leave an additional 60 million kroons in the city.

“As Tallinn’s main attraction is its Old Town, special attention has to be paid to its improvement,” said Palts.

At the tourism board, Piret Kallas said Estonia lacked unusual and interesting places where one could spend free time, adding that those which do exist are badly advertised. Another problem was a lack of accommodation in the cities of Parnu and Tallinn in summer, she said.

Opening the tourism fair Tourist 2001, Minister of Finance Siim Kallas on Sept. 20 said that while cycling around Estonia he had discovered a lack of places to stay overnight and eat. “We lack professionals who could generate new ideas,” said Kallas. “We envy countries that have a lot of sunshine, where there is no rain and nature is beautiful. But we should use the opportunities offered by our own country more thoroughly.”

The tourist board’s findings show that visitors have started traveling out of Tallinn to other parts of Estonia. Besides the traditional tourist destinations of Parnu and Saaremaa, Tartu and other places in southern Estonia have become more popular.

Visitors from Poland have increased following the establishment of a Tallinn-Warsaw air connection in the autumn of last year. This summer the number of visitors from Poland was up 40 percent on the previous year. The number of visitors from Germany increased by one-third.

The duration overnight visitors from Finland are staying has also increased, while the total number of Finnish tourists has decreased. Many Japanese visitors now combine visits to Finland with a brief trip to Estonia, said Piret Kallas.

The number of visitors from Latvia and Lithuania rediscovering Estonia is also increasing. “Latvians have started to use more commercial accommodation services, the Lithuanians make short trips and transit trips,” said Piret Kallas.

But not all the statistics indicate increases. The number of Swedish arrivals in Estonia has decreased by one-third, or 34,000, – a result attributed by the tourist board to changes in the schedule of the Tallinn- Stockholm ferry line. The increased cost of day trips is also thought to have decreased the number of people traveling between Estonia and Stockholm.

According to Bodin of the Radisson SAS, a 15 percent decrease in the value of Sweden’s currency relative to the Estonian kroon since January this year is also deterring Swedes from visiting.

But Domina Hotels and Resorts may be attracting those who would formerly have stayed at the Radisson SAS. Tompel said the number of Swedes staying in her hotels had tripled. But she added that the murder of two Swedes here this year had deterred Swedes.

“Swedish newspapers tend to write about the bad things happening in the area, but Swedes that happen to come here are very much surprised in a positive way and are very likely to return,” she said.

With safety concerns paramount following this month’s terrorist attacks in the United States, Estonia should become a more attractive destination fro visitors from Western Europe and Russia, she said.

Overcoming seasonal fluctuations in occupancy (Tallinn’s hotels are 90 percent occupied in summer and 37 percent in winter) must be a priority, said Tompel. “There are several ways of attracting visitors to Estonia in winter, but it depends on the financial resources available. They will come if you create an event. This can be connected to a hotel, but it is better if the whole city is involved. It could be for example a Ferrari race, a special contest, a sporting event or a concert. It is a pity that the Eurovision song contest takes place in May.”

Bodin said Estonia should build on Estonia’s reputation for a beautiful countryside, reasonable prices and musical events. Abroad, Estonia should particularly draw attention to opportunities for hunting and fishing and seeing magnificent wildlife and handicrafts.
Source: http://www.baltictimes.com/news/articles/5512/

Markets need not panic, yet

The Baltic Times, VILNIUS
By Edvinas Butkus, contribution by Kari Kurm
Sep 20, 2001

As elsewhere in the world, the Baltic financial and securities markets trembled somewhat last week but had calmed down by the end of the horror.

“We were tied to events in America,” Kaur Elviste, of Trigon Markets told the Baltic News Service. “Like elsewhere, it was overreaction all the way at the beginning. But then the markets calmed down and investors’ self-confidence was restored.”

The attacks in the United States made people in Estonia, Latvia and Lithuania rush to change their U.S. dollars. Petrol prices crept up, brokers sweated in response to initial downs, but they relaxed somewhat when they saw gains on the securities markets.

Meanwhile, central bankers and governments came under intense pressure. Lithuania’s central bank said it saw no grounds for panic. Its intention of repegging the litas from the U.S. dollar to the euro in February 2002 remained unchanged, Reinoldijus Sarkinas, the bank’s chairman told BNS, “There are no grounds at all for an immediate repeg of the national currency from the U.S. dollar to the euro.”

Sarkinas’s comments came after Kazimiera Prunskiene, a former Lithuanian prime minister and now a member of the Parliament’s economics committee, had called for a swift repegging of the litas.

Currently pegged at the rate of $1 to 4 litas, the litas will be repegged to the euro on Feb. 2, 2002. A decision on its value against the euro will be based on the value of the euro to the dollar as announced by the European Central Bank on Feb. 1, 2002.

According to Lithuanian television, over $1 million were exchanged in Lithuania on the day of the attacks. Like their neighbors in Estonia and Latvia, people in Lithuania rushed to change their dollars into euros or other European currencies, mostly German marks. But the selling stopped as abruptly as it began.

“The dollar is Lithuania’s anchor currency, so I don’t see any sense in changing dollars into litas, as most Lithuanians are doing,” Sarkinas told BNS. “The exchange rate of the dollar to the litas will remain stable. We feel no necessity to convene extraordinary meetings of the board or anything like that.”

But Estonia’s Finance Ministry acknowledged that events in the United States might have an impact. On Sept. 12 it said Estonia might postpone the issue, planned for late October, of government bonds worth 100 million euros ($90.9 million) or 1.56 billion kroons. “The insecurity of the financial markets may lead to increased volatility, wider spreads and a reduction in liquidity, which for Estonia, as the borrower would mean higher overall costs,” the ministry said in a press release.

Ulle Mathiesen, head of the Finance Ministry’s treasury department, told BNS a decision on the issue had not yet been made, but the chances of postponement had increased.

Preparations for the issue were in their final stages, she said, adding that a final decision will be made in mid-October.

It had been planned that the money raised would be used to reduce financial risks and finance the purchase of long-range radar costing 15.3 million euros or 239.45 million kroons. The postponement would have no impact on Estonia’s state budget, said the ministry.

If it goes ahead the issue will be managed by Credit Suisse First Boston, which will market the bonds and issue quotations for them until they mature.

Margarita Starkeviciute, a Lithuanian financial analyst, said she saw no reasons for panicking or speaking about blows to the national economy.

“Lithuania is used to crises. Banks are flush with money, so there won’t be any sudden changes,” she said. “Moreover, Lithuania’s open economy is dependent not only on the West, but also on the East, and the East is growing.”

In Latvia, Central Bank President Einars Repse said that future developments would depend on trust in the economic stability of the United States. The lat was not under threat, he said.

Nevertheless, if the U.S. population limited its spending to the purchase of food and other basic needs, this could be the downfall of the U.S. economy and would affect the value of the dollar, Repse added.

The Baltic Times asked leading Estonian analysts, “How will last week’s tragedy in New York affect Estonia’s economy?” Most of those questioned by Kairi Kurm said the impact would be indirect, via Western Europe, especially through Estonia’s main trading partners.

Maris Lauri, analyst at Hansabank Markets:

There will be no direct influence on the Estonian economy. If consumer spending in the United States decreases considerably it will first affect Western Europe and only then reach Estonia.

An increase in the dollar exchange rate might affect our prices. As for fuel prices, it depends on whether the United States takes military action. If nothing happens I predict a slowdown in economic growth until the second quarter of next year.

Rain Lohmus, manager of investment bank LHV Direct:

It will definitely influence our economy. Sluggishness will appear in about six months via Scandinavia’s technology sector. This tragedy will also hit us through a decrease in tourism. But I don’t believe its influence will be long term.

I would not predict an increase in fuel prices. If the amount of traveling decreases, so will the consumption of fuel. People like to believe in terrible things.

Margus Uudam, deputy secretary of state at the Ministry of Finance:

The impact will be through the Scandinavian market, which is our biggest export partner. Scandinavian economic growth is dependent on the electronics sector, which in turn is influenced by the behavior of U.S. consumers.

It is difficult to predict the much-debated movement of the dollar and fuel prices. There are too many variables which may shape trends.

Toomas Reisenbuk, head of research at Trigon Markets:

The picture is very unclear at this point. The effect on Estonia’s economy would be through the global economy and the European market. The Estonian economy depends on what governments and central banks plan to do about monetary and fiscal policies.

Fundamentally, the influence of this tragedy on our economy is negative, especially in its effect on consumer confidence.

Janno Toots, public relations adviser at the Bank of Estonia:

Esto-nia’s outlook is heavily influenced by the economic prospects of our major trading partners in Europe, especially Finland and Sweden. GDP growth in these countries has been less than expected in the first half of 2001 and forecasts for 2002 have already been cut.

Estonian export volumes may experience a slowdown – not only in the electronics sector.

The volume of investments from Western Europe is crucial – a decrease in this figure may impact the cost of capital. However, if interest rates in Europe are cut this would have a positive effect in Estonia.

Source: http://www.baltictimes.com/news/articles/5480/

Employees obliged to hold private pension plans

The Baltic Times, TALLINN
By Kairi Kurm
Sept 20, 2001

The Estonian Parliament adopted on Sept. 12 a bill on the so-called second pillar of the three pillar pension reform. The second pillar, which foresees funding pensions by paying monthly installments into a pension fund, was promoted as a way of invigorating Estonia’s capital market.But Olev Raju, a member of the opposition Center Party is skeptical. “This bill was framed without proper consideration,” he protested. “That’s why the whole opposition voted against it. The new bill is a way of regulating the finance market at taxpayers’ expense. What needs regulating is the pension reform process.”

The Tallinn Stock Exchange and the Central Securities Depository welcomed the bill. The stock exchange’s management believes the second pillar will increase levels of domestic saving and investment on the Estonian securities market. It will add to the stability of the economy, making it is less dependent on volatile inflows of foreign investment, said Gert Tiivas, chief executive of the stock exchange. “This is a bold and farsighted political move, which will have a long-term positive effect on Estonia’s economy.

“It has been clear for a long time that the current pension system is not able to guarantee normal living standards for tomorrow’s retirees. Parliament has now taken a big step toward encouraging private savings so people will be better off in the future.”

Jaanus Erlemann, chairman of the Central Securities Depository, said that together with the other state institutions and banks involved the depository felt responsible for the successful launch of the system. “We are convinced we can guarantee a modern, efficiently operated infrastructure,” he said.

The second pillar system will become effective on Oct. 1, having been approved by the president. People will be able to join the scheme and choose an obligatory pension fund starting from March 1, 2002. Payments to the fund will begin on July 1, 2002.

Under the bill employees will pay 2 percent of their income and the Tax Board will contribute 4 percent of the 20 percent social tax which employees currently pay under the so-called first pillar of the social security system. The state will cover payments transferred from the Tax Board, which may total up to 1 billion kroons ($57.14 million) per year.

Raju believes pensions may decrease as a result of the removal of money from the first pillar social insurance fund. “Pensioners are expected to receive 6.8 billion kroons per year. But if we take 4 percent from the first pillar, pensions will decrease by one-fifth. Do we have the guts to decrease their pensions?”

Estonia’s social tax is 33 percent of the monthly gross wage, 20 percent of which is allocated to the Tax Board for pensions. Today, for each person receiving a pension in Estonia there are 1.7 people in employment, a ratio which is set to decrease further.

Payments under the second pillar will be mandatory for anyone born in 1983 or later, meaning it will be about 40 years before all those in employment are obliged to contribute. Those born before 1983 who decide to join the system do not have the option of pulling out later. Sums paid into the scheme can be inherited.

The three-pillar pension system was first introduced in June 1997. The first pillar is a state pension and the third one is a voluntary endowment pension, which enables people to invest the equivalent of up to 15 percent of the amount they pay in income tax free of charge in one of four pension funds. Today only about 7 percent make use of this option.

Kadi Oorn, of the Ministry of Finance, said people will eventually be able to choose between three or four pension funds.

“We’ve placed strict requirements on fund managers,” she said. “The manager’s stake in the fund has to reach 2 percent and all the transactions go through the account operating bank, which controls the correctness of the deal.”

But Raju believes the manager’s share should be at least 4 percent, as is common in many other countries.

Under the scheme, fund managers are limited in how they invest in securities and deposits. If they fail to follow the rules and make a mistake, losses are to be covered first from their stake in the fund, then by their equity capital and a compensation fund. If these three are not sufficient, the state guarantees to make up the rest in the form of a loan to the fund manager.

Robert Kitt, administrator at LHV Pension Fund, one of the companies planning to manage second pillar pension funds, says investors’ money will be safe. “The current pension is small and under present arrangements will stay that way forever. Someone has to support the growing number of pensioners, so why shouldn’t people support themselves?”

The state, he added, is offering good terms.

According to Kitt, a person with a 10,000 kroon gross salary joining the second pillar with 40 years to go before retirement stands to get a pension half the size of his or her present income. For those willing to pay an additional 750 kroons monthly, their pension will be similar to the salary they have been used to. By contrast, those not investing in the second or third pillar stand to get a pension that is 20 percent of their income.

Today an average pension is about 1,500 kroons. The retirement age for women is 58 and for men, 63.

Harri Taliga, social secretary at the Estonian Central Trade Unions’ Association, said people would be unable to understand the pension scheme:

“The higher the productivity rate of the fund, the more alluring the pension becomes. But how should I know what the future brings? By how much will inflation rise? How much will the funds yield and how much will the administration costs be?

“People know that if they put 2 percent in the account, the state will add another 4 percent. And if they die, their children will inherit the money. But that is all that they understand.”

Source: http://www.baltictimes.com/news/articles/5486/

Death toll from poisoned alcohol rises in Parnu

The Baltic Times, TALLINN
By Kairi Kurm
Sep 13, 2001

The seaside town of Parnu in southwestern Estonia is in the grip of a tragedy. As The Baltic Times went to press 43 people had died from drinking methanol spirit.With 77 more people hospitalized, most of them in a coma, the final toll may be much higher. But, 22 people have recovered and were released from the hospital.

The liquid, which victims took to be illegally distilled alcohol, was sold in plastic soft-drink bottles in Parnu and the surrounding countryside for 30 kroons ($1.76) per liter.

The first victim was found dead at 10 a.m. on Sept. 8., and by 9 p.m. that evening seven more had died and 12 were seriously ill.

The dead were aged 18 and upwards, and several were women.

“The condition of the sick is very serious,” said Raido Paasma, head of the intensive care department at Parnu Hospital. “Most of the patients have had to be transported to Tallinn and Tartu hospitals.”

Doctors treating the sick said it took 12 hours for symptoms to appear. Lemon flavoring was reported to have been added to the poisoned alcohol.

A team of more than 50 police officers from Parnu began an investigation on Sept. 9. Since then 10 people have been detained in connection with the sale of illegal alcohol. On Sept. 10, a 400 liter store of methanol was found in a farmhouse.

On national TV, viewers saw one woman who had regained consciousness say she had noticed nothing unusual about the alcohol. “Money is more important for the people who sold it than human life,” she added.

President Lennart Meri, addressing Parliament on Sept. 10, said the deaths were a legacy of Soviet-era conditions in the countryside.

Indrek Raudjalg, spokesman for the Estonian police department, gave details of the police response: “Police have been working intensively since Sunday and have carried out a number of searches. We have received a lot of anonymous information about possible counterfeit alcohol sales.”

A crisis commission was set up Sept. 10. Estonian Interior Minister Tarmo Loodus urged people to pass to police any information they had about counterfeit alcohol sales and to hand in suspicious alcoholic beverages to police.

Unlike ordinary vodka, so-called “wood alcohol” or methanol (CH3OH) has a distinctive smell. An ingredient in paint and wax, as little as 5 grams to 10 grams of the spirit can blind a person, while a 30 gram dose is likely to kill.

The last incident of mass poisoning from methanol in Estonia took place in the 1980s when a group of people broke into a delivery tanker in Kohtla-Jarve. The death toll reached 36.

According to the Estonian Vodka Association, illegal vodka accounts for 35 percent of the total vodka market. The association has repeatedly proposed decreasing the price gap between legal and illegal alcohol so that people can afford legal products.

Excise duty on alcohol is currently 1.7 times higher than that suggested by European Union directives, says the association. Dropping the tax take from the current level of 145 kroons per liter of pure alcohol to 118 kroons – the level at the end of 1998 – would add 150 million kroons to the annual state budget.

The state currently takes 29 kroons from a 50 kroon bottle of vodka – the cheapest on the market. The same quantity costs 25 kroons on the black market.

The association’s research shows vodka drinkers to be very price-conscious. “In Narva every second garage has a small alcohol distillery,” said Sirje Potissepp of the association. “People drink because they are unoccupied. Increasing the price of alcohol would not prevent alcohol consumption. These problems will only disappear as living standards rise. Then people will find other hobbies.”

Source: http://www.baltictimes.com/news/articles/5436/

Shareholders were made public

The Baltic Times, TALLINN
By Kairi Kurm
Sep 13, 2001

Investors and others can now get quick information on companies listed on the Tallinn Stock Exchange thanks to its new home page http://www.tse.ee.In the past those interested in information on companies had to own at least one share and pay an additional 500 kroon ($30) fee to get a list of shareholders.

The data are renewed at the beginning of every working day by the Estonian Central Depository for Securities.

Gert Tiivas, chairman of the board at the Tallinn Stock Exchange, said that the access adds transparency and reliability to the securities market.

“In the near future, we intend to enhance easier information analysis on our home page through providing access for obtaining excerpts from shareholder lists at any selected period, and the possibility of making complex inquiries,” he said.

Eva Palu, a spokesman at the Tallinn Stock Exchange, said that in the future it would be possible to detect questionable business practices, because the exchange is planning to open an insider register and expose holdings in related companies.

Analysts praised the availability of the shareholders’ list on the exchange’s Web site. Urmas Riiel, an analyst from Hansabank Markets, said that the stock exchange should have done it a long time ago.

“It was very troublesome before,” said Veikko Maripuu, an analyst from Suprema.

In the past Suprema made at least one shareholder list request to the stock exchange a month. Maripuu said that he did not need the information about small shareholders, only that regarding about significant ownership changes, which is published on the stock exchange Web site since the beginning of last year.

“People can now see the portfolios of the management of different companies and the size of shareholders and make their analysis,” said Kristel Kivinurm, head of sales and trading at Trigon Capital.
Source: http://www.baltictimes.com/news/articles/5453/

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