SECONDARY MARKET 1996

The capitalisation of the Estonian stock market grew five-fold, from EEK 1,975 million to EEK 9,819 million.

The Tallinn Stock Exchange opened with just 11 listed securities. At the end of 1996 there were 19 listed securities on the exchange. Foreign investment in securities has always been important and at the beginning of TSE operations overseas investors accounted for 40.5 percent of the capitalisation of traded securities. It dipped to 35.4 percent but picked up in 1997.

The trend of recently privatised companies joining the securities market was begun by Tallinna Farmaatsiatehas, Norma, Kalev, Rakvere Lihakombinaat and Eesti Näitused coming to the Exchange. They were joined by EVEA Bank, EMV and Pennu.

1997

Capitalisation of the Estonian stock market continued growing, resting at year-end at EEK 18,002 million, 88 percent of which came from the EEK 15,805 million worth of shares traded on the Exchange. Nine of every ten sales on the securities market are handled by the TSE.

The increased total market capitalisation was due both to rising share prices - the ECDS index grew four and a half times - and new companies entering the stock market.

Again companies organising initial initial public offerings came into the market. Merko Ehitus, Viisnurk, Leks Kindlustus, ASA Kindlustus, ESS, Harju Elekter and Fakto joined.

By year-end the number of traded securities had increased to 41 - shares of 28 companies, nine bond issues, the shares of three funds and privatisation securities. Shares have clearly come to dominate the TSE’s turnover leaving other securities of little importance at present.

Foreign investment grew throughout 1997, reaching 45.44 percent at the end of the year.

PRIMARY MARKET

Although debt instruments have not been very important on the secondary market a lot of fixed income securities have been issued over the past two years.

1996

In 1996 the ECDS registered 76 debt issues, valued at EEK 2 billion. Three-month commercial papers were popular with investors. There was less demand for bonds with more than a year term. There were 35 debt instruments with more than a year term issued and 41 with less than a year term. The total value of issued debt instruments was EEK 1 532 million.

The primary issuers of commercial papers were infrastructure companies such as the Tallinna Sadam, Eesti Telefon and Tallinna Veevarustuse ja Kanalisatsiooni ME, the most active issuers of bonds were municipalities. As a rule the interest rate of commercial papers was between eight and ten percent while the rate for bonds reached 14 percent.

The major borrower in the bond market was the Finnish Merita Bank which organised two programmes of bond issues with total volumes of EEK 150 million and EEK 250 million, respectively. Estonian issuers kept mainly in the EEK 20 million to EEK 50 million range. The main borrowers were infrastructure companies and municipalities, being joined by leasing companies.

The ECDS registered 16 new share issues, three of which were public. They sold for EEK 0.6 billion. The largest public issue was by Hoiupank, totalling EEK 107.2 million.

1997

Activity was up on the primary market in 1997. There were 170 new issues of debt instruments totalling EEK 5 288.8 million, 38 with over a year term, their nominal value being EEK 1 041.2 million and 132 with under a year term with a nominal value of EEK 4 247.6 million. By year end there were EEK 3 507.9 million worth of debt instruments in circulation. Interest rates for long-term debt instruments remained between ten and 12 percent and short-term debt instruments at six to nine percent. Issue volumes rose to EEK 50 million, the largest being Hansapank’s EEK 400 million, six-year term bond issue.

Last year there were 39 share issues, 19 of which were public. The companies raised EEK 1.5 billion in share capital. Again the largest public issue was Hoiupank’s, totalling EEK 690 million. That was followed by the shipping company Hansatee’s EEK 200 million issue.

Holdings in securities traded on the SE 31.12.97

TALSE and EVK indices


Talibor 1996-1997


Foreign investments to the TSE


Tse monthly turnover (mln EEK)

Tse average daily turnover (mln EEK)

Listed securities share on OTC market


Breakdown of TSE market capitalisation by industries 31.12.97


Market structure of traded shares TSE 31.12.97


Number of securities traded on TSE

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