Analytics, Financial Services, Investments, Latvia

Riga Stock Exchange.

The impact of the drop of the market value is also strongly felt the by large companies with significant impact on the economy of Latvia, reports LETA.

Percentage-wise the biggest drop is experienced by Valmieras stikla skiedra (Valmiera Fiberglass, VSS) with its market value down almost 80%. The price for the company's shares has dropped to the lowest level since VSS shares were first quoted on RSE in 1997. On September 25 this year, the price for one VSS share was LVL 0.37, last time the price was this low in 1998.

The alcoholic beverage giant Latvijas Balzams' (LB) value has shrunk by almost 71%.

In the past year's time, the value of VSS reduced by LVL 33.9 million, and the value of LB – by LVL 23.2 million.

During the last 12 months, market value of the pharmaceuticals company Olainfarm reduced by 70% or LVL 28.2 million, the value of the metallurgical company Liepajas metalurgs dropped by 50% or LVL 32.1 million, also the oil transit king Venstpils nafta lost half of its market value and, among the RSE quoted companies, the latter experienced the strongest decrease in terms of money as its market value is now by LVL 165.1 million lower than it was one year ago.

"The rapid decrease of value of the companies, quoted on RSE was caused by a perilous combination – halt of economic development in the Baltic countries at the same time with the global markets' liquidity crisis, which only contributed to the foreign investors' growing antipathies towards investments in the Baltic market, including RSE," says senior shares analyst at Parex banka Janis Pranevics.

He pointed out that a year ago, the Baltic States' shares were sold for a higher price than those of higher-developed countries due to the attributed growth potential. However now, due to the recession, there is no reason to set higher prices for the Baltic shares.

Securities broker at Swedbank, Juris Jankovskis, prognosticates that no significant improvement of the situation is to be expected in the next six months' time, in the best case scenario the price of the shares could stabilize and remain at the current level.