After reaching a multiyear peak in the first quarter, the Tallinn Stock Exchange index OMXT declined in the second quarter by 3 percent, to 812.7 points.
LHV analyst Rasmus Noormägi said the decline should not be cause for too much concern because the first quarter was strong - with growth of 14 percent - and the annual forecast remains unchanged, reported uudised.err.ee.
"If the second quarter were to be evaluated in hindsight, it could be described as an all-round healthy period of catching our breath," Noormägi said.
Among the few companies that did achieve growth in the second quarter were the clothing producer Baltika, real estate firm Arco Vara and food producer Premia.
"After a strong first quarter [...] it would perhaps have been too much to hope for the same rally to continue,” the analyst said.
Noormägi said the OMXT, which has 16 listed companies, was significantly impacted during the quarter by the payment of dividends, which affected share prices and therefore the index.
Dividends were paid out by all of the major companies in the exchange, including Tallink, Olympic, Tallinna Kaubamaja, Tallinna Vesi, Merko and Silvano.
Also during the second quarter, companies filed their annual earnings reports, which Noormägi said did not bring any major surprises.
"The earnings of most companies were indeed improved from a year ago, but the rate of sales and profits declined as expected,” he said.
At the beginning of the year, LHV forecast annual growth of 10-15 percent for the exchange in 2013. That forecast still stands, Noormägi said.
"Therefore, in the next half-year we expect more lateral movement, but more likely we at LHV envision a little room for growth in the Tallinn exchange,” he said.
"That is supported by the fact that, with regard to the price level, shares tend to be cheap in the whole of the Baltics, not only on Tallinn's exchange.”