How To Invest In Lithuania

296

This guide is for intrepid investors who are wondering how to invest in stocks in Lithuania and Nasdaq OMX Vilnius. Curious about investing in other frontier markets? Check out a list of our guides here.

Lithuania is a country of just 2.8 million people and is one of the three Baltic states (the others being Estonia and Latvia). Despite its size, it punches above its weight and was recently ranked 34th on Bloomberg’s Innovation Index, the 3rd highest frontier market economy on the list. A strong science and technology industry in Lithuania is a big factor in that ranking, which is fueled by education levels that are higher than any other country in the EU: Lithuania has a 100% literacy rate, and 94.6% of the population has a secondary degree.

Another area Lithuania stands out on a global stage is in basketball where its national team is 5th on global rankings despite having a population less than 1% of first place USA. Fans of the NBA recognize Arvydas Sabonis as one of the best-passing big men of all time, while notable current players include Jonas Valanciunas of the Toronto Raptors.

Lithuania’s stock exchange is part of the Nasdaq Baltic Indices, where its main index, OMX Vilnius, is still up about 18% over the past year despite the February 2018 sell-off. It is a market that is dominated by energy companies, while some niches are well covered such as a funeral company and three separate dairy companies.

Monitor Lithuania and other Frontier Markets on our Dashboard!

Economy

Lithuania had a GDP growth rate of 2.3% in 2016, and was forecasted to grow at 3.8% in 2017, slightly lagging its Baltic peers. However, with a GDP per capita on a PPP basis of almost $35,000, it is slightly ahead of its Baltic peers and a frontier economy based solely on the size of its population.

The economy is well diversified and has an Economic Complexity Score of 0.46, good for 26th out of 89 countries ranked. Machinery and Petroleum are its two biggest exports, with each accounting for about 14% of total exports.

Here is a visualization of Lithuania’s main exports:Lithuania’s credit rating is currently investment grade: A- with S&P, A3 with Moody’s, and A- with Fitch.

Notable Companies in Lithuania:

  • Lietuvos Energija (SOE): the state energy holding company that owns nearly 95% of the shares in Energijos Skirstymo Operatorius (ESO)
  • Energijos Skirstymo Operatorius (Ticker: ESO1L): the main energy and gas company in Lithuania, and the largest Lithuanian stock by market cap on the exchange. Was created as a merger between LESTO (main electricity company) and Lietuvos dujos (main natural gas and petroleum company) in 2016
  • Vilniaus Prekyba (Private): holding company that owns some of the largest chains of retail stores, pharmacies, and real estate in Lithuania. Maxima and Euroapotheca are the two biggest brands in this holding company, and are by themselves some of the largest companies in Lithuania
  • Telia Lietuva (Ticker: TEL1L): the main telecom company in Lithuania with divisions focused on telecommunications, internet, and TV. Second largest company on the exchange by market cap.

It is interesting to note that 4 of the top 5 listed Lithuanian companies on the exchange are related to energy and electricity.

Is It Safe To Invest In Lithuania?

According to our Investment Safety Rankings, Lithuania is ranked #28 out of 192 countries on our list, making it a very safe country to invest in.

Can Foreigners Invest In Lithuania?

Yes, foreigners are allowed to invest in Lithuania. As a small country that is part of the EU it welcomes foreign investment, and as a member of Nasdaq/OMX, it is easy for foreigners to invest in local equities and bonds.

Nasdaq / OMX Vilnius Snapshot:

In operation since: 1993, as the Vilnius Stock Exchange

Location: Vilnius, Lithuania

Market hours: 10:00 to 16:00

Currency: Euro (EUR)

Market Capitalization (as of February 2018): 3.81 billion EUR (2.75 billion EUR on the main list, 1.04 billion EUR on the secondary list, 22 million on the alternative list)

Local Listed companies (as of July 2017): 29 listed stocks (12 on Main List, 15 on Secondary List, 2 on Alternative Market)

Taxes: Lithuania uses a flat tax system where most income is taxed at 15%, including capital gains. Interest and dividends are taxed at 10%

Foreign currency controls: none, part of the EU

Main Index: OMX Vilnius Index:

How the Riga Stock Exchange / Nasdaq Riga is Structured:

Lithuania’s stock market is integrated with Estonia and Latvia as part of the Baltic Regulated Market owned by Nasdaq. This means that stocks from all 3 countries are listed as part of the same market to reduce barriers to entry between them.

There are three different sections of the Baltic Regulated Market: the Baltic Main List, which contains the most actively traded shares, the Baltic Secondary List, which is a step below, and First North (Baltic MTF) which is an Alternative Market.

Local Companies Listed on the Baltic Regulated Market:

There are 25 companies total listed on the exchange, market cap as of 10 Feb 2018:

Company Board Sector Market Cap (mil, EUR)
Apranga Main Retail            139
Energijos Skirstymo Operatorius Main Energy            769
Grigeo Main Paper              91
Klaipėdos nafta Main Oil            189
Linas Agro Group Main Agriculture            105
Lietuvos energijos gamyba Main Energy            381
Panevėžio statybos trestas Main Construction             15
Pieno žvaigždės Main Food             53
Rokiškio sūris Main Food             97
Šiaulių bankas Main Bank           267
Telia Lietuva Main Telecom           597
Vilkyškių pieninė Main Food             43
Amber Grid Secondary Energy           266
AUGA group AB Secondary Food           111
Gubernija Secondary Beverage              3
INVL Technology Secondary Technology             19
INVL Baltic Farmland Secondary Agriculture             14
INVL Baltic Real Estate Secondary Real Estate             30
Invalda INVL Secondary Finance             62
Kauno energija Secondary Energy             22
LITGRID Secondary Energy            348
Linas Secondary Textiles               2
Snaigė Secondary Appliances              11
Utenos trikotažas Secondary Textiles              10
Vilniaus baldai Secondary Furniture              47
Vilniaus degtinė Secondary Beverage              12
Žemaitijos pienas Secondary Food              83
East West Agro First North Agriculture              14
K2 LT First North Funeral               8

 

How to Invest in Lithuanian Stocks and Nasdaq OMX Vilnius:

As a member exchange of Nasdaq OMX, Lithuania’s stocks are hosted on a modern trading infrastructure. You need to open a brokerage account with any member of the exchange, which you can find here.

There are 22 different firms that operate on the Vilnius exchange, many of which will also allow you to trade in Estonia and Latvia. We recommend contacting one of the more specialized brokerage firms who are used to dealing with foreign investors.

Make sure to check out our other investing guides here!

Leave a Reply