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. Last Updated: 07/27/2016

Latvians Start Up Exchange

RIGA, Latvia -- Latvia on Tuesday opened its first fully functioning stock exchange for 55 years -- the last one having been closed by the Soviet authorities.

The revival was a modest one, with only three companies listed and a volume of 232 shares traded at a total value of 186.14 lats ($354), but Latvian Prime Minister Maris Gailis said much depended on the exchange's future growth.

"We connect our hopes for economic development with the establishment of a securities market," Gailis told diplomats, government officials and brokers at opening ceremonies in the elegant 19th-century hall which housed Riga's first exchange.

Latvia's original stock exchange was closed in 1940 when the Soviet Union began its 50-year occupation of the Baltic state, and its reestablishment is regarded as a key plank in the country's post-Soviet transition to a market economy.

Quotations will initially be made once a week on Tuesdays using a fixed-price mechanism, and transactions will be settled four days after each trading session.

In addition to shares, 4,040 lats in government bonds were sold during Tuesday's trading.

The opening coincided with a major banking crisis that has shaken confidence in the country's infant post-communist financial system. The country's largest commercial bank, Banka Baltija, collapsed in May with losses of more than 200 million lats. Almost a fifth of the population had deposits there.

But brokers and government officials are confident the exchange will eventually soar, despite its humble beginnings and the banking crisis.

"The stock market is linked to the privatization process. As that picks up, trading will grow," said Janis Naglis, director general of the government privatization agency.