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Oslo Børs: Summer record in the primary market

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Oslo Børs

Oslo Børs: Summer record in the primary market

“Norwegian brokerage firms have never raised as much capital for companies being admitted to listing in the course of the ‘holiday’ month of July as they have this year. Similarly, they have never before helped so many companies to list on the stock exchange in the course of the month of July”, comments Øivind Amundsen, the President and CEO of Oslo Børs.

July is usually a quiet month, but this year the primary market has seen a record-breaking level of activity. As of today, the 26-year-old historical record for the number of companies admitted to listing or trading in the month of July has already been broken, and the amount of new equity raised by these companies is also at a record high.

  • Six new companies. When ELOP rings the bell to mark the start of trading today, the 26-year-old record of five companies being admitted to listing or trading set in July 1994 is finally broken. The last time four companies were admitted to listing or trading in the month of July was 2006 – see table below.
  • NOK 3.5 billion raised through share issues by new companies prior to their admission to listing or trading. The amount that the six new companies have raised this July is without historical precedent.
  • The combined market capitalisation of the companies admitted to listing or trading in July is also a new record. The combined market capitalisation of the new companies on their first day was NOK 14.5 billion, and this is the highest ever amount for July.

The coronavirus crisis has not held the primary market back
“There has been an unusually high level of activity in the primary market since April. We were surprised by how quickly the primary market picked up after the pandemic struck in March”, continues Øivind Amundsen.

Since March, companies listed or traded at Oslo Børs have raised NOK 18.6 billion through share issues. The amount raised during the last few months has been unusually high. May was the best May since 2011, and the amount raised in July is also the highest in nine years.

High stock market valuations
“The high level of pressure prior to the summer holiday period is one of the reasons for the record-high level of activity we are now seeing in July. In addition, there is much to indicate that company owners who choose to take their companies public are achieving good valuations. Earlier this year, there was a tendency for private equity funds to snap up candidates for admission to listing or trading. Company owners are now reporting that going public is their best option”, explains Øivind Amundsen.

Shares across a range of sectors at Oslo Børs have risen strongly. Both the index that measures the performance of shares in healthcare companies and the IT index are at historic highs, and have bucked the trend set by the rest of the market. While the Oslo Børs Benchmark Index is down 10.2% since the start of 2020, the Healthcare index has risen 15.7%, and the IT index has risen 17.7%.

All of the companies admitted to listing or trading this July have been in these two sectors: four are IT companies and two are biotechs.

2020 has quickly caught up with last year
14 new companies have been admitted to listing or trading at Oslo Børs since the start of 2020. In 2019 as a whole, 15 new companies were admitted to listing or trading, meaning that this autumn records from previous years may be reached.

“We have a number of candidates banging at our door that are planning to be admitted to listing or trading after the summer. The door for raising new equity is wide open. In recent months the atmosphere in the primary market has been very favourable, but history teaches us that this can change quickly, and that companies can pause their plans to list”, explains Øivind Amundsen.

Busiest July months:
Year Number of new listings Market cap first day of listing (NOK bn) Amount raised by IPOs (NOK bn)
2020 6 14,5 3,5
1994 5 2,4 0,0
2006 4 5,1 0,2
2001 4 5,0 0,0
1997 4 4,7 0,0
1999 4 2,7 0,0
1998 4 1,7 0,0
2018 3 11,8 0,0
2011 3 6,6 0,6
2008 3 6,4 0,2
2005 3 2,5 0,0
2014 3 2,2 0,4
1996 2 4,9 0,0

14 new companies have been admitted to listing or trading at Oslo Børs since the start of 2020. In 2019 as a whole, 15 new companies were admitted to listing or trading:

 

 

 

 

 

New listings in 2020 Date Market capitalisation first day of listing (NOK mill)
Aker BioMarine 2020-07-06 9.170
Pexip Holding 2020-05-14 8.662
BW Energy Limited 2020-02-19 5.658
Mercell Holding 2020-07-09 2.390
Quantafuel 2020-02-20 2.289
Andfjord Salmon 2020-06-23 1.992
Ice Fish Farm 2020-06-05 1.976
Northern Ocean Ltd. 2020-02-27 1.665
Sikri Holding 2020-07-15 1.327
EXACT Therapeutics 2020-07-14 954
Cloudberry Clean Energy 2020-04-02 575
ELOP* 2020-07-17 422
ayfie Group 2020-07-07 276
Romsdal Sparebank 2020-04-24 216
Grand total 37.573

* Based on the IPO price

Both the index that measures the performance of shares in healthcare companies and the IT index are at historic highs, and have bucked the trend set by the rest of the market:

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