Developed and Developing Capital Markets In Interaction: the Baltic Countries Economic Sector Indices in the Context of the World

Developing financial markets, globalization and easy to reach financial products for investors in any market increase scientists', professional and individual investors' interest in prices of financial products and important factors, that cause them. Lithuania's, Latvia's and Estonia's financial markets joined the global market NASDAQ OMX, but they are still attributed to developing markets. Factors determining stock and stock price index can differ across securities markets and countries. Factors, which impact well-developed countries' capital markets, are not appropriate for analysis of developing countries' capital markets. The aim of research is to perform investigation of separate countries and economic branches' factors in order to estimate prices change tendency of particular securities markets. Also, developing and developed securities markets' interrelation is relevant, because small-scale emerging financial markets are dependent on other markets' external effects. When economic relations between countries strengthen, private capital flows to developing countries or in particular sectors increase, they grow together and these countries or sectors securities markets integrate into the global financial market. Therefore, the aim is to assess the extent of developed and developing capital markets interrelation, i.e. determine the extent to which the developed capital markets affect the Baltic market and economic sectors and to identify the effects of Baltic stock index trends. The object of the article: NASDAQ OMX Baltic countries stock and stock price index trends in the period of 2001–2010