Increased share activity

Estonia_s stock exchange, much like its counterparts in Latvia and Lithuania, saw a boom in prices for much of 1996-1997, with some share values doubling or tripling in a year. But prices suddenly collapsed in a November, 1997 stock market crash, and they never really rebounded. Prices in Latvia and Lithuania haven_t performed as well in recent months. But since the beginning of 2000, many share prices on the Tallinn Stock Exchange have increased by nearly 50 percent—with the TALSE index rising from around 100 to 154 on February 14. Prior to the 1997 crash, the TALSE was nearly 400. Increased share activity seems to have been prompted by growing optimism about the Estonian economy, which should see strong 4 percent growth this year, compared to near-zero growth in 1999. Price-earnings ratios of many leading Estonian stocks are also said to be among the lowest in Europe, apparently attracting bargain hunters in recent weeks. Investors are also bullish about profits of Estonian banks, which have tended to drive the stock market's performance in the past. The Tallinn-based Hansapank, the largest bank in the region, has recently announced healthy profits for 1999 and is expected to do even better in 2000.