Estonia's exports rose to a record in November on growing demand in Sweden and Finland, the main markets for the Baltic country that adopted the euro this month.

Exports increased an annual 48 percent to 860.4 million euros ($1.1 billion), exceeding the previous record of 847.7 million euros set in October 2008, according to data published by the national statistics office in Tallinn today. Sixty-nine percent of exports went to European Union countries. The office will release more detailed data on Jan. 24.

The $19 billion economy, the second smallest in the euro region behind Malta, shrank by almost a fifth during 2008 and 2009 after a property bubble burst and the global credit crisis crimped Nordic demand. It may grow 3.9 percent this year and next after 2.5 percent expansion in 2010, according to central bank forecasts.

Exports, led by wireless-network gear for Stockholm-based Ericsson AB and wind generators for Zurich-based ABB Ltd., are powering the recovery. Shipments of goods rose an annual 36 percent in the third quarter, helping gross domestic product expand 5 percent.

Domestic demand remains a drag on growth as unemployment stood at 15.5 percent in the third quarter and high levels of private debt restrict lending.

Eoin Treacy's view Estonia shared the binge on cheap credit that fuelled property bubbles in a number of European countries. However, it was one of very few to tackle the resulting problems head on. Deep cuts to public spending, lower wages and higher taxes have all been part of the solution and emigration has also been a dominant theme. However, the relative strength of the domestic stock market index is a testament to the success of the policies employed. (Also see Comment of the Day on February 18th 2010)


The Tallinn Index remains in a staircase, step sequence uptrend. A sustained move below 650 would be required to begin to question medium-term upside potential. Its neighbours Latvia and Lithuania are also in relatively consistent uptrends.

Ukraine, following an impressive advance from the March 2009 lows, pulled back sharply in April and is only now retesting that peak. A number of other markets, though less volatile share this lengthy consolidation characteristic. The Czech Republic, Hungary and Romania have all firmed within yearlong ranges. Poland has outperformed, breaking upwards to new recovery highs in September, and Russia broke upwards in December.

Croatia has rallied impressively within its base over the last month and needs to sustain a move above 2300 to indicate a return to medium-term demand dominance. Bulgaria, Slovenia, Serbia and Slovakia all remain in base formations.

Turkey, as a bridge between Europe and the Middle East remains a regional leader. It found support near the 200-day MA in December and remains in an impressive medium-term uptrend. A sustained move below 60,000 would be required to begin to question medium-term upside potential.

Israel is another regional leader, though more for its leading position in cutting edge technology than for any particular regional focus. It broke above its 2007 peak in December and a sustained move below the 200-day MA would be required to question the consistency of the medium-term uptrend.

Following its successful bid for the World Cup, Qatar broke out of a yearlong range and continues to extend its medium-term uptrend. Egypt, Oman and Lebanon remain within similarly lengthy ranges and have rallied to test the upper sides over the last month.

Morocco had a comparatively shallow correction relative to the size of the advance that peaked in 2008. It found support near 20,000 two years ago and has posted a progression of higher reaction lows since early 2010. A sustained move below 25,000 would now be required to question medium-term upside potential.

Tunisia was one of the best performing markets in 2009 and for much of 2010. However it hit a medium-term peak in October, and broke below the 200-day MA this week. A countermanding upward dynamic would now be required to question potential for additional downside.

Saudi Arabia has been ranging with a very mild upward bias for almost two years and appears to be in need of a catalyst to spur investment demand. The UAE, Dubai and Abu Dhabi all continue to form bases.

Kuwait, Jordan and Bahrain's medium-term downtrends have lost momentum but they continue to post progressions of lower rally highs which will need to be broken to indicate returns to demand dominance.