01/07/2014 – The Norwegian State is a big winner on the stock market in an unusually strong first six months for Oslo Børs.
Since the start of the year, the Oslo Børs Benchmark Index has soared, gaining 12.6%, and we have to look back to 2009 to find share prices rising as strongly in the first six months of a year. By way of comparison, the Benchmark Index rose 25.2% in the first six months of 2009, and the year went on to become the strongest in the index’s history with a rise of 64.8%. In contrast, the Benchmark Index rose 5.6% in the first half of last year, when it registered an annual rise of 23.6%.
The Norwegian State is one of the year’s big winners on the stock market. Oslo Børs’s biggest company, Statoil, is the largest contributor to the rise in the Benchmark Index. 67% owned by the state, the company has also been one of the strongest risers, and has so far this year posted gains of 32.9%. Moreover, there are many other companies in the state’s portfolio that have posted gains stronger than the Benchmark Index. Yara and Norsk Hydro have delivered returns of over 20% so far this year, for example.
The proportion of the shares listed on Oslo Børs owned by the state is at its highest for five years. Because of the solid rises posted by shares in the state’s portfolio, the proportion of the value of listed shares that the state owns has risen to 37.1%. For this reason, the state has overtaken foreign investors as the largest shareholder category at Oslo Børs. This is entirely due to the state owning the ‘right’ shares, namely those that have posted the best returns, as the state has not altered the size of any of its holdings over the course of the year. At the start of the year, foreign investors owned 37.1% of the total value of shares listed on Oslo Børs, whilst the proportion belonging to the state was 34.8%. At present, the proportion of the market owned by foreign investors has fallen to 36.6%.
Trading volumes are up sharply from last year. The average daily value of share trading so far this year has been NOK 4.4 billion, with a daily average of 86, 162 transactions. When measured in NOK, the value of shares traded is up 24.4% when compared to the same period last year, whilst the overall number of transactions has risen by 15.6%.
The increase in activity reflects investors’ increased interest in equities, both by Norwegian and international investors. Other stock exchanges in Europe have experienced similar increased interest in share trading.
There has been a strong increase in the number of companies listing for the first time on the Oslo market, and companies are raising more capital through new share issues. Ten new companies have been listed on the Oslo Børs and Oslo Axess marketplaces in the first half of the year, including today’s two newcomers, Cxense and Havyard. In addition Serendex Pharmaceuticals has been approved for listing. This means that 11 new companies are likely to have been listed before the start of the Norwegian summer holiday season, which would be one fewer than in all of 2013. In the same period last year, five new companies were listed.
NOK 9.3 billion has been raised through share issues, up by NOK 2.3 billion or 33.6% compared to the first half of last year.
