The most tangible impact of the global COVID-19 health crisis on the Nasdaq Baltic stock exchanges is seen in an increase in trading activity and a decrease of market prices. For 2019 the average daily share turnover was equal to €1.07mn, while during March 2020, when the pandemic was starting to spread through Baltics, the average daily share turnover increased to €3.5mn.
On March 13, the daily share turnover reached a record €8.6mn. Moreover, some of the main Baltic indexes saw the biggest intraday drops ever, for example, on March 12, OMXR fell by 15.07% from the previous day and OMXBBGI fell by 10.20%, while on March 16, OMXT decreased in value by 10.06% from the previous day.
“Since the Baltic states were among the ones closing their borders in spring, the companies that were affected the most were of course those whose business relied mainly upon tourism, such as Novaturas, Tallink Group, etc.,” Laima Viskinte, trading specialist, transaction services at Nasdaq Baltic, told bne IntelliNews.
Among the Latvian companies affected the most in terms of price decrease in spring were Latvijas Balzams, Olainfarm, Rīgas Kuģu Būvētava, SAF Tehnika, Valmieras Stikla Šķiedra and HansaMatrix, the Nasdaq representative said.
However, it is difficult to say how much of the price decrease of these companies was due to them being impacted by the COVID-19 pandemic, and how much can be attributed to the overall stressed market situation that was seen on Nasdaq Baltic markets during mid-March 2020.
Nevertheless, on the positive side, both Latvian and Lithuanian government were able to attract more financing from the markets even in the stressed market situation.
“There have been some positive capital attraction examples from corporate issuers as well, e.g. for the LHV Group Subordinated Bond offer the demand was 3.4 times higher than the offered bonds, and Ignitis Grupe was able to attract €450mn through their IPO in autumn 2020,” the Nasdaq Baltic officer said.
COVID-19 shot news and Nasdaq Baltic
Specific COVID-19 vaccine impact is difficult to distinguish from other factors that affect share price development and trading activity, Viskinte noted.
“If looking at the overall trading activity during the middle of November, when the news about vaccine came out, there was a small increase in both turnover and number of trades executed on the market,” she said.
Some Nasdaq Baltic indexes also show a noticeable development. For example, the Baltic Benchmark index (OMXBBGI), Baltic 10 index (OMXB10) and Nasdaq Tallinn index (OMXT) all saw a jump of around 3% during November 9. In the following days the Nasdaq Vilnius market index (OMXV) also climbed higher, yet it is difficult to say how much of that was due to the vaccine. The Nasdaq Riga market index (OMXR), however, does not seem to be affected by the news.
When it comes to particular companies, those such as Tallink and Novaturas are reliant on tourist flows, thus, COVID-19 vaccine news had a positive impact on the price development in the first few days.
For example, for Tallink, the share price rose by 11.6% between November 9 and 11, when the first indications of successful vaccine results appeared, combined with the news about the EU’s deal with BioNtech/Pfizer for vaccine doses.
For Vilnius-based Novaturas, at the same time, the price increased by 8.29%. Moreover, the trading activity of both shares increased during mid-November.
Also, for regional fashion retailer Baltika, there has been both a price and trading activity increase during the period when COVID-19 vaccine news was breaking.
“The first spike in trading activity and price was due to an announcement about financial results, while the second increase in price and trading activity is around the time when news about vaccine was published,” the Nasdaq Baltic official said.
She noted that, even though there is no price change visible due to COVID-19 vaccine news for oil terminal company Klaipedos Nafta, its trading activity increased noticeably during the time of intense vaccine newsflow.
On Nasdaq Riga there are two international pharmaceutical companies listed, Grindeks and Olainfarm, but there are no significant trading activity changes visible for these companies. Only for Grindeks did the price slightly move upwards during mid-November 2020.