Tallinna Vesi dispute likely to alarm foreign investors

Foreign investors are doubtless keeping a close eye on the ongoing dispute between Tallinna Vesi, the country’s biggest water utility, and the Estonian Competition Authority, writes Äripäev. This week the authority issued an injunction to the company, demanding that it either submit a proposal by November 14 to cut its service prices or have all current prices unilaterally cut by 36%.

The exact percentage is also a topic of debate since the company is interpreting the injunction as saying that the current water tariff must be cut 29%. 

On the news that that the company may lose about 12 million euros in annual earnings due to being forced to lower its water tariff by almost a third, Tallinna Vesi share price fell to the lowest level since it started trading in June 2005.

In a stock exchange statement, Tallinna Vesi said that it completely disagrees with the position of the Competition Authority and will seek a court injunction to block the move.

Read more from BBN

Read also: Tallinn Water profit margin at 60%


Tartu University among world top 400

Estonia’s University of Tartu has for the first time merited a spot in the World University Rankings of Times Higher Education (THE), placing in the shared 350th to 400th position in this year’s rankings.

At the top of the newly-released rankings is the California Institute of Technology. Harvard University, which led the rankings for the last seven years, is in shared second together with Stanford University, followed by Oxford and Princeton.

THE ranked the top universities across the globe on the basis of indicators such as the learning environment, volume, income and reputation of research, citations, innovation and international outlook, i.e. share for foreign staff and students.

The United States and Britain have the most universities in THE scoreboard. Of universities in Estonia’s neighbourhood, the Swedish Karolinska Institute, Lund and Uppsala were ranked respectively 32nd, 80th and 87th, and the University of Helsinki 91st.

Source: Estonian Review

Tartu University website


Growing deposits in 2Q

 In the second quarter the financial position of households improved, owing to the continued growth in deposits. The loan liabilities of non-financial corporations decreased by 50 million euros while the deposits increased by approximately 92 million euros, owing mainly to the growth of foreign deposits. In contrast to the previous two quarters repayments of foreign loans exceeded the volume of new loans and domestic liabilities grew due to increased borrowing. However, the stock of domestic debt was approximately 5 per cent lower and foreign debt 6 per cent higher compared to the previous year. Over the year the share of foreign debt has increased by 2 percentage points to 26 per cent. As in the first quarter, the trade credit of companies vis-à-vis the rest of the world increased significantly (more than 200 million euros), owing to the strong increase in exports.

In the second quarter the financial position of households improved further, owing to the continued growth in deposits. The financial assets of households increased due to the growth of deposits by approximately 200 million euros. The rise in assets was reduced by a decrease of 110 million euros in the value of securities. In contrast to previous quarters, loan liabilities remained broadly unchanged as borrowing increased in the spring. In total, the loan liabilities of households have decreased by 8.2 per cent since the peak at the end of 2008.

Public sector’s assets increased. The deposits of the public sector grew in the second quarter by 84.5 million euros. Equity investments increased by approximately the same amount.

In the second quarter of 2011 the Estonian economy as a whole was a net lender vis-à-vis the rest of the world (22 million euros). In the first quarter households and the public sector were the net lenders and non-financial corporations and financial institutions were the net borrowers.

Read more and see graph on the website of Bank of Estonia

Author:  Viljar Vald, Financial Sector Policy Division of Eesti Pank, Senior Specialist