Risk fund leaves investors with nothing

Buyers of units of Gild Arbitrage, Estonia’s first risk fund, are likely to lose all of their investment since the units are worthy nothing and the fund’s liabilities exceed its assets which include a few lots in Armenia that may or may not have gold or copper reserves.

The fund was founded ten years ago by former fund manager Tõnno Vähk and Tõnis Haavel, former partner of Gild Bankers. Another partner of Gild Bankers, Rain Tamm, was also actively involved.

The three that are still investors in the fund have put Tõnu Pehk in charge. Pehk has made attempts to revive the fund, but is now losing hope as the net asset value of the fund is zero.

Fund’s creditors have received about half of their investment, but unequally since some bond holders had collateral, while most did not.

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Three companies interested in taking over the Tallinn plant of Elcoteq

In addition to French electronics manufacturer Eolane, also two other companies are considering a bid for Elcoteq Tallin, a subsidiary of the bankrupt Finnish electronics assembly group Elcoteq SE.

Jan Kotka, CEO of Elcoteq Tallinn, said that sales negotiations were ongoing with all three companies, but declined to name the other two because they were listed companies.

Kotka said that the Luxembourg-based bankruptcy administrator of Elcoteq SE had told him that the sale of Elcoteq Tallinn could be closed already in January.

Annual revenues of Elcoteq Tallinn were 4.6 million euros in 2010 and the company made a profit of 136,000 euros.

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Swedbank Estonia to sell subsidiaries to parent company

Swedbank, the largest bank in Estonia, announced yesterday that it had decided to change its legal structure in reference to the bank’s three Baltic subsidiaries.

Among others, the company  has decided to make Latvian and Lithuanian subsidiaries directly owned by Swedbank AB, like in the case of Swedbank Estonia.  In connection with the changes, Swedbank in Estonia will pay 243 million euros in dividends that it earned from the operations in Latvia and Lithuania

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Share prices in Tallinn up 208 pct in a year

The Tallinn share price index OMXT is up 208% when measured between March 9, 2010 and March 9, 2011.

The price movements of shares have been varying during that time, between 0% and 1,246%:

Silvano FG stars with the 1,246% surge, followed by Merko Ehitus’ 392%, Harju Elekter’s 345% and Olympic EG’s – 344% surge.

Tallinna Kaubamaja share has surged 319%, Ekspress Grupp by 270%, Arco Vara by 253%, Tallink Grupp by 222%, Baltika by 186%, Järvevana by 131%, Nordecon by 129%, Viisnurk by 122%, Trigon PD by 54% and Tallinna Vesi by 0%.

Last year, the Estonian securities market demonstrated the largest growth in its history, with the Tallinn Stock Exchange index OMXT rising 72.6%.

The share prices of most of the Estonian listed companies increased during the year, and nine of them had an increase of 50% or more.

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Tallinn Stock Exhange index up 73 pct in 2010

In 2010 the Estonian securities market demonstrated the largest growth in its history, with the Tallinn Stock Exchange index OMXT rising 72.6%, according to Tex Vertmann from NASDAQ OMX.

The share prices of most of the Estonian listed companies increased during the year, and nine of them had an increase of 50% or more. The largest increases were enjoyed by Silvano Fashion Group and Tallink Grupp (250% and 113.5%, respectively). The number of shareholders has also grown in most of the listed companies.

The shareholders were mainly attracted to Tallinna Vesi (+50%), Silvano Fashion Group (+39%) and Olympic Entertainment Group (+29%). Among the countries of origin of stock exchange investors, the share of Swedish investors decreased significantly in the last year (from 47.8% to 5.6%), mainly due to the exit of Eesti Telekom and Norma from the stock exchange. The share of Estonian investors increased from 34% to 63%.

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Estonian Energy IPO plans shelved

Estonia’s government decided against listing a minority stake of state power company Eesti Energia and will instead provide the financing for a capital increase at the biggest Baltic utility. Instead, the government will buy new shares issued by Eesti Energia,but has not yet decided on the exact capital increase.

“An initial public offering would require amending legislation to protect the state’s strategic interests and to further decrease administrative risks,” the government said in a statement quoted by Bloomberg.

Timing for an initial public offering of Eesti Energi would be “extremely bad given the mood on the financial markets,” Prime Minister Andrus Ansip told journalists yesterday. Using government borrowing to boost Eesti Energia’s capital would be “relatively easy and cheap for Estonia,” given its public- sector debt was only 7.2 percent of gross domestic product last year, the lowest in the European Union, he said last week.

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Norma to disappear from Tallinn stock exchange

Although it is not by any means a done deal, the intention of Norma’s parent group Autoliv to buy out small shareholders from Norma shows that another company could soon be delisted from Tallinn Stock Exchange.

Today’s Äripäev writes that Autoliv announced that its offer applies only if it manages to get 90% of shares of Norma. It already owns 51% of the company  and claims that it has agreement to acquire another 26%, bringing the level to 77%.
At present Autoliv owns 51% of the company, foreign investor own 31.8% and Estonian investors own 17.2%.

Small shareholders who own about 200 million kroons worth of Norma shares claim that Autoliv offer of 92.3 kroons a share is too low, especially since Norma has more than 600 million kroons in cash that Autoliv needs to buy the outstanding shares. In other words, Autoliv is buying Norma for Norma’s own money.

Another reason why small shareholders are angry is that Norma’s management board has proposed not to pay out any dividends for last year. Norma has been one of the best dividend payers on the Tallinn Stock Exchange.

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Eesti Energia IPO may come in June

The initial public offering of shares of Estonian state power company Eesti Energia may take place in June, according to a representative of the ministry of economic affairs.

According to the TV news programme Aktuaalne Kaamera, this requires that the government approves the IPO plan in May at the latest.

The government has also been considering an alternative to IPO, ie to raise the company’s equity to finance investments of as much as 20 billion kroons in coming years for the construction of new energy units and increasing the share oil production capacity.

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“It’s buying panic on Tallinn stock exchange”

Share prices in Tallinn have been growing for eight consecutive days and OMX Tallinn Index is now at its highest level in 15 months, mainly buoyed by growing speculation that Estonia is on its way to the euro zone.

Yesterday’s Äripäev writes that the OMX Tallinn index has jumped 24% this year, making it the world’s best- performing equity market and extending last year’s 47% advance. In one year, share prices in Tallinn have increased 60%.

Some professionals already warn about overconfidence of investors. Mehis Raud, fund manager in Trigon, said that those investing right now in stocks for speculative purposes are taking a huge risk. “Markets have going up very rapidly and the results of companies and news from foreign markets may not be so strong,” he said. 

Raud warned that one should look out for companies with high debt because potential new share issues could dilute the value of holdings.

Raud said that the share price rally of recent days was buying panic. “On the one hand you have institutional investors who have revalued their risks and want to acquire large holdings before the euro decision comes. On the other hand you have local investors who are withdrawing deposits and investing them in stocks.”

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Value of listed companies grew 32 pct

The market capitalisation of the companies listed on the Tallinn stock exchange grew 32% during 2009 to 28.94 billion kroons.
During 2008, the companies’ market capitalisation dropped 2.93-fold to 21.96 billion kroons.
The star performer in 2009 was Harju Elekter, which saw the value of its share more than double.
Retailer Tallinna Kaubamaja soared 74%, builder Merko Ehitus 79% and Olympic 57%.
Losing the most, or 37% of its value, was the garment company Baltika.
The OMXT index put on 47.21% during the year to finish at 404.58 points. The Lithuanian market showed almost equal performance with a 46.04% rise in the index to 261.77 points.
The OMXR index of the Riga stock exchange moved up by just 2.82% and the joint Baltic index finished the year 37.83% higher at 314.42 points.
The total turnover of the Tallinn stock exchange generated in 84 547 transactions during 2009 was 4.17 billion kroons.

Source: Estonian Review

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