Ex-communist Europe
Baltic tigers go hunting
Be greedy when others are fearful
Nov 2nd 2011, 16:21 by V.D. | LONDON
BALTIC companies see the gloom and doom in the rest of Europe as fine weather for shopping. That is the main result of a survey of some 150 businesses by Sorainen, a leading law firm in the region and the business newspapers Äripäev (Estonia), Dienas bizness (Latvia) and Verslo žinios (Lithuania). The number of companies in the three states considering business expansion through M&As is 1.5 times higher than those considering selling part, or all, of their business.
Half of those polled said they were considering an acquisition with one-fifth citing specific plans. A quarter said they would consider selling their business if they received an offer that was lucrative enough but only 10% had concrete plans of doing so. Most of those wanting to sell were smaller companies, with a turnover of €5m ($7m) or less. Toomas Prangli, the regional head of Sorainen’s M&A and Private Equity team says the findings highlight a new trend: previously Baltic companies preferred organic growth to expansion by acquisition.
All three countries fare well in the World Bank’s ‘Doing Business’ index. Estonia was pipped this year by Latvia--but this now seems to have been due to a clerical error. They boast some of the highest real GDP growth rate estimates in the European Union for 2011: 4.9% for Estonia, 3.3% for Latvia and 5% for Lithuania. (GDP growth rate in the EU in the same period is 1.8%). Exports are booming, up by 25.6% in Estonia, 7.9% in Lithuania and 6.9% in Latvia in 2011.
Estonian companies are the most ambitious, according to the survey, with plans for international expansion. Latvian and Lithuanian firms mostly express interest in local acquisitions. The number of new registered businesses in Estonia is also booming, expected to reach 14,000 in 2011, 43% more than in 2008. If whatever makes that happen could be bottled and sold abroad, it could be a nice little earner too.
Eastern approaches deals with the economic, political, security and cultural aspects of the eastern half of the European continent. It incorporates the long-running "Europe.view" weekly column. The blog is named after the wartime memoirs of the British soldier Sir Fitzroy Maclean.
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the title is quite ridiculous
After reading the following comment by the reputable Bloomberg agency I remain unimpressed by the GDP growth rate in Estonia (4.9%) and Lithuania (5.0). Even though I am far from being a supporter of the Yanukovych policy initiatives, Ukraine's 6.6% rate looks really bright when compared to Russia's miserable 4.1% rate.
(I hope that Russian FSB has no intention to claim that this Bloomberg report has been "planted" by the CIA as part of a deliberate 'conspiracy' to discredit Putin's record as Russia's Prime Minister !)
"Oct. 31 (Bloomberg) -- Ukraine’s economy grew at the fastest pace in more than three years in the third quarter, helped by a good harvest and strong domestic consumption.
Gross domestic product advanced 6.6 percent in the three- month period ending in September from the same period a year ago, the quickest since the first quarter of 2008, the state statistics committee said today in a statement on its website. The result exceeded a median estimate of 5.9 percent by eight economists in a Bloomberg survey."
trilirium
"How about learning some basic facts? ))"
Yes, how about it ? Maybe you can provide some answers like, for example:
a) anticipated direct effect of, say, 25% drop in oil and gas prices on Russia's GDP ? How about in combination with 25% decline in the volume of oil and gas exported to Europe ?
b) How many Russian multi-billionaires have invested their (stolen) hundreds of $$billions abroad - I mean cumulative sum total of the Russian capital flight over the past, say, ten to twenty years ?
c) what is the annual cost to the Russian economy of state subsidies to unproductive, ancient, over-staffed Soviet era plants just to maintain (correct: pretend to maintain) statistical fictions of the employment levels ?
etc. etc. etc.
"Yes, how about it ? Maybe you can provide some answers like, for example..."
Guess, you're back to the favorite tactic of yours: avoid answering asked questions, and try to flood your opponent with demagogy?
Never mind: my question was quite rhetoric. Obvoiusly, you never tried to learn any facts before posting here.
Well, if you asked:
a) anticipated direct effect of, say, 25% drop in oil and gas prices on Russia's GDP ? How about in combination with 25% decline in the volume of oil and gas exported to Europe?
Completely unrelated to the topic. If we're going to "anticipate" -- why not anticipate, for example, direct effect for two- or threefold devaluation of euro (or USD)?
I prefere discuss reality, not anticipations.
b) How many Russian multi-billionaires have invested their (stolen) hundreds of $$billions abroad - I mean cumulative sum total of the Russian capital flight over the past, say, ten to twenty years?
Do you realize, what so called "capital flight" -- in other words is "capital investment"?
Yes, Russian multi-billionaires are buing some valuable active abroads. So?
c) what is the annual cost to the Russian economy of state subsidies to unproductive, ancient, over-staffed Soviet era plants just to maintain (correct: pretend to maintain) statistical fictions of the employment levels?
Give me an example of "unproductive, ancient, over-staffed Soviet era plants" -- and I'll try to tell, how much "state subsidies" it is receiving.
carts writes: "Hi, what do 2011 exports from Estonia consist of?" ----- Computer hackers.
Dragos, keep in mind that size does matter. It's easier to run a small country such as Estonia, compared to a huge country such as Russia.
Hi, what do 2011 exports from Estonia consist of?
Statistics http://www.estonianexport.ee/?page=b6&lang=eng does not reveal much.
Industrial production is mostly low-tech .. but the share of high-tech is gradually increasing.
Our power stations are burning local oil shale and we are exporting electricity. Only about 2 % of electricity is produced by wind power but that is also increasing every year.
In Sillamäe there is an unique facility producing rare metals http://www.silmet.ee/
I hope this gave you some idea about Estonian exports.
@trilirium
The Baltics don’t have an oil land gas tap to release whenever they remain out of cash like Russia does. They really need to produce something.
Anyways, don’t get too excited about those numbers. One year ago or two, the Baltics were having GDP contractions much bigger than the rest of EU. From roadkill to tiger, it’s a long way.
"The Baltics don’t have an oil land gas tap to release whenever they remain out of cash like Russia does. They really need to produce something."
So, *what* do they produce? ;)
@Didomyk:
How about learning some basic facts? ))
GDP growth in Russia: 4.1% in the first quarter of 2011.
Source: Rosstat.
With GDP growth rates 4.9% for Estonia, 3.3% for Latvia and 5% for Lithuania I believe Putin should waste no time hiring the Estonians to run Russia's economy for the next five years, followed by the Lithuanians to manage Kremlin affairs for the next five years.
After that decade the Russians will no longer need Putin or any of his partners. Problems solved.