Stock Market in Estonia

The Estonian stock market works by the principle – fewer in number, but more good companies.

* Although the Tallinn stock market lists the smallest number of companies – 15 – all (except for one) have been listed on the Main List since 2008.
* As in the other Baltic States, the stock market was an important instrument in the process of privatization of the state-owned and municipal companies. In 1995, 10 banks, 9 brokerage companies and state institutions (Bank of Estonia, Ministry of Finance and Compensation Fund) established the Stock Exchange of Tallinn, which started trading in shares of 11 companies in 1996.
* In 2005 the exchange in Tallinn has reached the historically largest turnover – EUR 1,9 billion, which was furthered by Hansapank leaving the regulated market. The following year the turnover decreased by 63%.
* Over 16 years, substantial changes have taken place with respect to the companies listed on the exchange. However, the stock market of Estonia was still aiming for qualitative indicators – shares in very good companies were quoted on the lists.
* Over a period of seven years until 2005, some companies (mainly banks) left the Tallinn stock market, however, this process was stopped when the privatized municipal water management company Tallinn Vesi, was listed on the stock market. Since then, various new companies, which used the exchange as a platform for raising capital, including the media company Express Grupp, the real estate company Arco Vara, the shipping company Tallink Grupp, the gambling, casino operator Olympic Entertainment Group, food company Premia Foods, have also entered the securities market. In 2010, the company Norma was delisted from the Stock Exchange, the departure of Eesti Telecom was also a heavy blow.
* In early 2012 only one company Tallinna Kaubamaja, which started trading in 1996 – was still trading on the exchange.
* Strategic and financial investors hold shares in the companies quoted on the exchange. At the same time, there are a large number of minority shareholders (holding less than 10% shares), which ensures a higher free float or number of shares in free circulation, making a company attractive for active trading in its shares.
* The further development of NASDAQ OMX Tallinn will also be determined by the alternative securities list First North, which is intended mostly for small and medium companies, and which was formed on the stock markets of the Baltic States several years ago. Furthermore, NASDAQ OMX Tallinn has entered into the cooperation memorandum with KredEx to develop the local capital market and ensure additional financing opportunities for the companies intending to start trading in shares on the First North.

Facts for 2011

* Total capitalization of the 15 companies quoted on the Tallinn exchange has reached EUR 1,24 billion by the end of the year, 26,33% less than at the end of 2010, and, compared with the pre-crisis period – as of the end of 2007, down by 69,8%.
The substantial decline in capitalization resulted from the crisis on the global financial markets, because due to high liquidity, investors were able to easily divest their holdings in companies on the Tallinn exchange.
* In 2011, prices of nearly all shares decline, with the largest drop – by 74% – experienced by shares in Baltika. The largest rise in prices was only 12.6%, by shares in Viisnurk.
* A total of 83 700 trades were made on the exchange in 2011, with 145,5 million shares changing hands for EUR 187,4 million
* The most trades – 20 500 in 2011 – were made with shares of Tallink Grupp and turnover resulting from these transactions was the highest on the exchange in 2011 – EUR 50,3 million. A year earlier this honor went to Olympic Entertainment Group, with 24 000 trades in its shares amounting to turnover of EUR 63 million.
* Compared to the Lithuanian exchange, the capitalization companies on the Tallinn was significantly smaller (2,5 times, but compared to the Riga stock exchange, 1,5 times larger), turnover on the exchange was somewhat larger than in Lithuania (EUR 176 million) and several time larger than that of the Riga exchange.

Useful links
Stock Exchange – www.nasdaqomxbaltic.com
Financial and Capital Market Commission – www.fktk.lv
The Securities Commission of the Republic of Lithuania – www.vpk.lt
Financial Supervision Authority – www.fi.ee
Securities Register – www.e-register.ee

Photo: Stock.XCHNG