Last year in Estonian securities market
Last year, the Estonian securities market demonstrated the largest growth in its history, with the Tallinn Stock Exchange index OMXT rising 72.6%.
Nearly one-third of the population defers their retirement age and receipt of payments from second pillar to the funded pension.
The share prices of most of the Estonian listed companies increased during the year, and nine of them had an increase of 50% or more. The largest increases were enjoyed by Silvano Fashion Group and Tallink Grupp (250% and 113.5%, respectively). The number of shareholders has also grown in most of the listed companies. The shareholders were mainly attracted to Tallinna Vesi (+50%), Silvano Fashion Group (+39%) and Olympic Entertainment Group (+29%). Among the countries of origin of stock exchange investors, the share of Swedish investors decreased significantly in the last year (from 47.8% to 5.6%), mainly due to the exit of Eesti Telekom and Norma from the stock exchange. The share of Estonian investors increased from 34% to 63%.
A record number of transactions were also made on Tallinn Stock Exchange – 101,300 securities transactions were concluded amounting to a turnover of EUR 243.3 million. Although the turnover was the weakest of the past years, the stock exchange performed second best in the last decade in terms of the number of transactions. As a result of the exit of several listed companies, the total market value of the listed companies dropped by 8.9%, remaining at the level of EUR 1.68 billion as of the year-end.
The past year of the Estonian Central Securities Depository (CSD) was mainly influenced by matters related to the euro changeover. The website www.e-register.ee/euro contains information on the topics related to the euro changeover. Special euro calculators help calculate and compare the changes in the share capital.
As of the end of the last year, 6,645 companies were registered with CSD. While the number of registered public limited companies has decreased to some extent and only 4,386 of them were registered as of the year-end, the registration of private limited companies is significantly growing. As of the end of 2010, 2,259 private limited were entered in the register, of which 307 were added to the register within the last year.
In addition to the changes arising from the euro changeover, the entire infrastructure on which the Estonian securities market is based – the register and settlement system of securities – was renewed at the turn of the year. The CSD was the first depository in Europe to adopt the international standard for settlement messages.
In the last year, price fluctuations in the pension fund indexes were characterised by stable growth. The general index of funded pension (EPI) increased by 9.7% during the year. Also, the volumes of funded pension funds increased by 13%, reaching EUR 1.07 million (EEK 16.7 billion) by the year’s end. Compared to last year, the volume of additional funded pension funds increased by 24.6% to EUR 89.7 million (EUR 1.4 billion).
Since 2009, when funded pension payments began to be made, 8,685 people have submitted an application for receipt of pension from the second pillar. Nearly 4,800 people who are entitled to receive the funded pension have not yet filed any application and have deferred the payments. This year, approximately 2,600 persons will be added who are entitled to receive a pension from the second pillar.
The Estonian securities market is also influenced by several amendments to legislation that were approved in the past year. Now, a natural person may establish a private limited company without making a contribution at once. The share capital can also be down paid after foundation if the capital of a private limited company remains below EUR 25,000. But an amendment to the Income Tax Act allows for deferring taxation of the income earned on financial investments. This possibility is available if an investment account is used for making investments.
Last May, the shares of Premia Foods were added to the main list of the stock exchange. Eesti Telecom left the stock exchange in January and Norma in June. The two last bonds – ABC Grupp and LHV Ilmarise Kinnisvaraportfell – were also redeemed from the stock exchange in June. Currently, it is possible to trade in the shares of 15 companies on the Tallinn Stock Exchange.
At the end of the last year, the membership ended for two members of Tallinn Stock Exchange – Lithuanian member SNORAS-Jusu Tarpininkas in March and Swedish member HQ Bank AB in July. Since April, Reģionālā investīciju banka from Latvia has been a new member of Tallinn Stock Exchange. In August, the membership of Latvian member Parex banka was transferred to AS Citadele banka.
Two new advisors were added to the alternative market First North – Cresco Väärtpaberite AS in September and AS Redgate Capital in October. As of the year-end, there are altogether 18 advisers in the Baltic alternative markets, of whom eight are working in Estonia.
Last March, the Supervisory Board of CSD approved the application of Compensa Life Vienna Insurance Group SE for receiving the status of CSD’s account operator. Altogether 14 account operators are registered in the Estonian Central Securities Depository, including two foreign account operators.