October is normally the month that world stockmarkets fear the most, historically speaking because it is the month the year´s third-quarter results are presented. The market is less concerned by negative results in the first two quarters of the year, whereas autumn months in the red are often seen as a sign that the full year will not meet the expectations of those who deliver negative figures.
Volatile IT shares
As expected, major price falls among US technology giants fed through to other bourses across the world - including the Oslo Stock Exchange. At the same time October was a month of in some cases dramatic price fluctuations. The extremes were 11 and 19 October when the Oslo IT index fell and rose 6.5 and 10.6% respectively. In October as a whole the IT index rose by a marginal 0.06%, but can still point to a rise of 8% since New Year - which is far better than, say, the technology-heavy Nasdaq in the USA.
What did most to push up the Oslo index was Tandberg Television and Opticom, with value increases of 45.7 and 16.4% respectively. The opposite was the case with shares such as Infostream and SuperOffice which both lost just over 30%, and one of last month´s winners, InFocus, which dropped 17.9%.
Oil price having a rough time
The oil price was pulled in both directions during the month. On the one hand OPEC undertook a while ago a self-imposed production increase of 500,000 barrels after the price of North Sea oil had exceeded USD 28 for more than 20 days - which occurred towards the end of the month. This would undoubtedly have pushed down the oil price. On the other hand, the conflict in the Middle East, primarily represented by Iraq´s threat to cuts its entire production, pulled the price in the opposite direction. This naturally led to large day-to-day fluctuations in the oil price. Overall the oil price strengthened by almost two dollars, and was still above USD 30 per barrel of North Sea oil at month-end.
For many oil-related shares on the Oslo Stock Exchange October brought negative figures, and the shipping index fell 5.7%. Offshore shares such as PGS and Det Søndenfjeldske lost 16.9 and 11.7% respectively, while the giant Norsk Hydro also contributed with a price fall of some 3%. The cruise shares RCCL and NCL also fell - both by just over 11%. A better fate was in store for one of the year´s "big" shares, Frontline, which put on a further 8%. So far this year Frontline has increased its value by as much as 255%, making the company number 12 in size on the Exchange.
Valuable empties
Tomra, the manufacturer of deposit-return dispensers, can definitely be said to have had a positive year. The German government´s decision to introduce deposits on disposable packaging brought extra impetus to a Tomra share that was already thriving. In addition to large potentials in Germany, the company´s management also anticipates major market shares elsewhere in Europe - a view evidently shared by market players. In October Tomra scaled new heights, ending the month at NOK 373, up 25%.
With a market value of just over NOK 32 billion, Tomra is now the Exchange´s third largest company, topped only by industrial giants Norsk Hydro and Orkla.
Tomra ensured that the Oslo Stock Exchange´s industrial index (up 0.6%) had a positive month too. The Exchange´s only forestry share, Norske Skog, had a good month, putting on 17%. Once again, the two industrial shares to receive most attention were Kværner and Aker Maritime - in a favourable sense in price terms.
Still in play
The two last-mentioned groups were indeed still exposed to massive speculation in October. It all calmed down somewhat towards month-end when Aker Maritime sold its marine seismic business to a French company for almost NOK 6 billion. This fuelled speculation about what the company dominated by Kjell Inge Røkke would spend its newly acquired capital on. Kværner was one of many hot tips with November just round the corner.
Christiania Bank to be sold
After its bid had been with Christiania Bank for well over a year, the Swedish-Finnish MeritaNordbanken finally won through in October. On 15 October the Government Bank Insurance Fund agreed to sell its shares in Christiania. October otherwise proved a calm month for financial shares, with only minor price changes. The financial index rose 0.8%.
Three-month money market rates rose marginally through the month, suggesting that market expectations of further interest rate hikes has subsided somewhat. The general market perception is probably that the key short-term rates in Norway are nearing a peak this time round.
Oslo Stock Exchange still on top
The year as a whole shows that the Oslo Stock Exchange continues to perform well compared with other bourses across the world. So far this year the value of shares quoted in Oslo has risen by 10.9%, whereas for example the Dow Jones and FTSE have dropped 4.7 and 7.1% respectively. Persistent high oil prices and the fact that the Norwegian securities market is seen by many investors as a safe haven in a turbulent world are undoubtedly reasons for the favourable trend.
Derivatives market
In October an average of 11.143 contracts were signed per day, equivalent to an average of 13.001 per day for the year to date. A total of 245.137 contracts were entered into in October.