The Baltic Bourse That Eclipsed World All Thanks to Single Stock

  • Ventspils stock surges threefold on $80 million stake purchase
  • Only 5 of 93 markets tracked by Bloomberg gained since June

Latvian stocks have bucked the rout that sent emerging-market equities to the worst losses in four years, posting the biggest gains globally in the third quarter.

The rally was largely due to an $80 million purchase of shares in the nation’s pipeline and terminal operator, Ventspils Nafta AS. Its stock surged almost threefold this month after Vitol SA, the biggest independent oil trader in the world, bought 45 million shares to boost its stake to 93 percent. The 25-member OMX Nasdaq Riga index, of which Ventspils has a 36 percent weighting, rallied 30 percent in September after trading little changed in the previous two months. 

Shares rise threefold on $80 million stock purchase

“Ventspils Nafta has been in focus for investors while the surging return for the Riga index could bring general investor interest towards the region,” Andres Suimets, head of equity and institutional sales at Swedbank AS in Tallinn, said by e-mail. “Baltic markets don’t correlate much with short-term moves of developed markets while the indices are influenced by some stocks that have large weight.”

Only five of the 93 equity markets tracked posted gains since June as concern China’s economic slowdown was worsening roiled global markets, erasing more than $10 trillion from the value of equities worldwide and sending commodities to six-year lows. Prospects for higher interest rates also hurt demand for riskier assets, driving the MSCI Emerging Markets Index to a 19 percent slump.

Ventspils Nafta’s shares rose 73 percent on Sept. 10, three days before the company disclosed talks were talking place for the share transactions. The stock move, the biggest one-day rise in the company’s history, is being probed by the market regulator. The shares gained 0.7 percent to 3.12 euros in Riga on Wednesday.

Vitol plans to buy out the rest of Ventspils, a Latvian port and pipeline operator, and delist the company, Ventspils Chairman Robert Kirkup said on Sept. 22. Vitol owns the Ventspils stake through its Euromin subsidiary.

(An earlier version of this story corrected the quarter in the first paragraph.)

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