Estonian bourse tumbles as Y2K fears hit marketgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Estonian bourse tumbles as Y2K fears hit market
09:19 a.m. Sep 28, 1999 Eastern
By Alistair Holloway
TALLINN, Sept 28 (Reuters) - Fears of the Y2K millenium bug and concerns foreign investors are poised to close positions battered the Tallinn bourse again on Tuesday, and analysts said the trend show few signs of abating.
The negative sentiment pushed the TALSE index down 3.92 percent to 97.94 points as issues across the board were hit by a newspaper report that Y2K preparedness fears have pushed prices down some 10 percent this month.
But dealers said that while they did not think the millennium bug, a programming glitch that could cause widespread computer failure when the year 2000 arrives, will be a major problem, the downtrend is set to continue for the short-term.
``There was some negative comment in (the business newspaper) Aripaev and the market is just selling everything down, Norma, Hansapank, Optiva...The more speculative stocks are quite under pressure,'' said Hansapank dealer Romet Tepper.
All traded clue chips fell, Norma heaviest of all with a 10.53 percent fall to 34 kroons while Uhispank lost 7.11 percent to 20.90 kroons and heavyweight Telekom dropped to 81.75 kroons on a 3.82 percent loss.
``It is hard to understand this situation because considering all the fundamentals we don't see the kind of problems that preceeded (the) 1997 (market crash) although the exchange seems to be acting like that,'' said Uhispank analyst Sven Kunsing.
Millennium bug fears are worldwide, analysts said, adding that there are not grounds to show Estonia will experience widespread computer failure as 1999 switches to 2000.
``This is an over-reaction...to a problem that may not be there and the probablility of which is approaching zero,'' Kunsing added.
Analysts said that despite no firm evidence, some players are fearful that foreign investors are preparing to sell their Estonian positions, bolstering belief in a coming price fall and stoking the rush to sell among locals.
The Tallinn bourse has slumped by more than 20 percent since its year-high of 123.25 on May 12, though it is slightly higher than last year's close of 90.74.
Analysts said that all signs point to an upturn in the economy which has been slowly pulling itself out of a recession induced by the Russian finanical collapse last year.
Still, they added, it may take some positive news on the corporate front -- such as a deal between Norma and Swedish suitor Autolivto jar investors out of their bearish stance. ``The general sentiment is that an upswing on the market is expected towards the end of the year so you can find relatively inexpensive stocks there and it would be time to purchase them now,'' said one Finnish analyst.
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