Pavel Habšuda
The Slovak capital market traded at steady prices over the November 20 - December 19 period. The stock market in the period was characterised by large volumes of trading transacted towards the end of the year, as portfolio investors reviewed their portfolios and brokers closed short term positions.
The sizeable reshuffles and sell-offs of investor positions was also evidenced in the total trading volume on December 19, seeing trades of 5.51 billion crowns, while the entire month of November saw trades of only 7.28 billion crowns. December 19 was the last anonymous trading day and the last day on the stock exchange when direct trades could have been conducted with a standard T+3 financial and securities settlement.
FNM (National Property Fund) bonds were traded heavily towards the close of 2000. The FNM bonds mature on December 31, 2000, and will be redeemed over the course of the year 2001. The sole Slovak OTC market, the RM System, has been mandated by the FNM to organise the redemption process. The RM System plans to organise the collection of complete and accurate data of all bond holders in January and February 2001, while the process of redemption itself is scheduled to begin in March.
The bond will first be redeemed to original bond holders, followed by natural persons who bought the bonds as private investors, while last in the queue for redemption will be the legal entities, institutional investors holding the largest stakes.
Trading with shares on the anonymous market was dominated by those issues which had been traded heavily in 2H 2000. Nafta Gbely, the gas storage company, traded significantly on the anonymous market on the last trading day of that market (December 19, closing at 1,500 crowns).
The most strongly traded issues included Slovnaft, the sole Slovak crude oil refinery; VSŽ Kosice, one of the largest central European steelmakers; VÚB bank, the second largest Slovak commercial bank; and IRB bank, another state-owned commercial bank.
Both state-owned banks are in the process of privatisation, and their share price is, because of this, likely to be undervalued on the market. Thus, while the current share price of the VÚB issue is 750 crowns (as of December 19), a large stake might have a far bigger value for a strategic or a potential minority investor.
On December 15 a stake of 330,000 units of VÚB shares changed hands on the direct market for 1,894.24 crowns a piece.
The main Slovak share index (SAX) mirrored the steady development of the stock exchange, changing only fractionally in the course of the monitored period and closing at 94 points, up 1.4% (November 20 - December 19).
Pavel Habšuda is a treasury member at brokerage house Slávia Capital.
Comments and questions can be sent to him at phabsuda@slavia.sk
Author: Market Analysis
