STOCK EXCHANGE

Summary

Text by Bruno Lill,
Center for Markets in Transition, HSE, October 2001
Updated by Ville Rämänen in October 2002

The Riga Stock Exchange (RSE) was founded in December 1993. RSE is a non-profit joint stock company owned by 27 shareholders - major owners being Latvian commercial banks, brokerage companies, and the State Real Estate Fund. The operating principles were established in co-operation with the Paris Bourse and the Central Depository of France.

In 2000, the RSE official list and trading was dominated by three companies - the Latvijas Gaze, Latvijas Unibanka and Ventspils Nafta - as they accumulated almost 85% of the total equity trading turnover. The price of all three of them rose significantly during the year 2000, recording 100%, 79% and 30% price increases respectively. The key reason behind this trend was the interest of strategic investors. For example, Scandinaviska Enskilda Banken (SEB) decided to buy-back shares of Latvijas Unibanka from minor investors. However, once the buy-back was completed, SEB announced that it would halt quotation of Unibanka's shares on the RSE. (Nordea)

The consolidation trends did not pass by RSE as it started to co-operate with the other Baltic stock exchanges in 1999. The Baltic list, containing the shares of 15 largest and most widely traded Baltic companies, was launched at the beginning of 2000. In May 2000 RSE, along with the two other Baltic stock exchanges announced its intent to join NOREX, the alliance of Scandinavian Stock exchanges. However, in February 2001, the Finnish HEX group bought a majority stake in the Tallinn Stock Exchange, excluding the possibility of TSE from becoming a member of the Norex alliance, which is mainly led by the Stockholm stock exchange. Later on, HEX stated, that it does not consider it impossible to make a similar offer for RSE and National Stock Exchange of Lithuania (NSEL). This led RSE and NSEL to announce in May 2001 that they are abandoning their intention to cooperate with Norex. (Nordea country report 2000) In March 2002, HEX offered to acquire over 75% of the shares of Riga Stock Exchange. In the Summer, the 15 shareholders, representing 93% of all shares accepted the offer. In August 2002, the ownership details were finalised.