Oslo Bourse Review of 1999

December 1999 was the best December since 1988. Led by IT shares, the all-share index shot up 8.9 per cent. Several European bourses rose by an even greater margin. The IT index rose by all of 35.4 per cent. But a solid rise was also recorded for a number of other sectors: 8.6 per cent for the shipping index and 9.7 per cent for the industrial index. The all-share index rose 45.5 per cent in 1999, a figure topped on only three previous occasions: in 1983, 1989 and 1993. Even so it ended the year 4.4 per cent lower than the record achieved in May 1998, despite the new records posted by the industrial index and the IT index. The shipping index (offshore and shipping shares) is furthest from the 1998 peak. The US has called the tune on world bourses. The high-tech Nasdaq bourse posted the best year ever in 1999 with a rise of 85.6 per cent. In December the Nasdaq put on 22 per cent. However, not all sectors have performed equally well. The broader-based Standard & Poor 500 index rose 5.8 per cent in December and 19.5 per cent in 1999 as a whole. Among the leading bourses Helsinki rose by the greatest margin in December and in 1999: 29.4 and 162 per cent respectively. Nokia is the main contributor. In Europe the London, Zurich and Copenhagen bourses made the poorest showing in December and 1999. The FTSE-100 crept up 5.1 per cent in December and 17.8 per cent in 1999. The IT company Opticom´s share soared 269.6 per cent in December and climbed to fifth position on the Oslo Stock Exchange´s list of the biggest Norwegian companies. Only Norsk Hydro, Orkla, DnB and Kreditkassen are bigger. Opticom started the month in 20th place, rising 2,328.6 per cent over the year. Its market value on 1 January 1999 - NOK 686 million - rose to NOK 20.3 million by year-end. Opticom featured on the SMB list in 1999 and was the main contributor to the SMB list´s rise of 70.3 per cent in December and of 157.7 per cent in 1999 as a whole. A number of other IT shares on the SMB list also played a part, however. IT shares on the SMB list generally rose by a far bigger margin than IT shares on the Main List. SuperOffice and E-Line Group are on the heels of Opticom on the winners´ list for December. Opticom, Norman, Profdoc and SuperOffice, which are all IT companies, notched up the biggest rise in 1999. Shares and primary capital certificates worth NOK 2,261 million changed hands daily in December, compared with NOK 1,768 million through 1999 as a whole. At NOK 445.6 billion, the overall traded volume in 1999 has never been topped in any previous year. The old record of NOK 341.1 billion dates from 1997. The high turnover is due partly to the many buy-outs and attempted buy-outs and partly to the new trading system. Moreover, high returns have attracted new investors to the Oslo Stock Exchange. NCL was the most traded share in December after Star Cruises gained control of NCL. For 1999 as a whole Norsk Hydro, Saga Petroleum and Kreditkassen were the most traded shares. The new trading system has made the stockmarket more transparent and accessible, and has led to a higher share of Internet-based trading. The number of trades has also risen markedly - from 3,400 daily in 1998 to 5,200 in 1999 - and the average transaction size has fallen. The number of companies fell from 216 to 215 in December. There are now 21 fewer companies listed on Oslo Stock Exchange than at the start of the year. Most have disappeared due to takeovers or mergers with other companies. The value of companies delisted in 1999 is NOK 46,4 billion. Listed companies brought in NOK 1.369 million in December and NOK 14,4 billion in 1999 as a whole. Total market capitalisation (shares registered with the Norwegian Securities Depository) rose NOK 57.5 billion in December and NOK 110.6 billion in 1999 to NOK 582.9 billion. Never have so many option contracts - 19,088 - been traded daily as in December. Options in the OBX index, DnB and NCL were most popular. The volume traded in 1999 - 14,532 contracts - is also unprecedented. The old record of 8,051 contracts dates from 1997. The high trading volume is related to high activity levels in the stockmarket. Moreover, more investors have employed derivatives to hedge risk and increase returns. Interest rate levels remained unchanged in December. Rising foreign rates held back Norwegian long rates. The German 10-year rate rose 0.22 percentage point in December, while the Norwegian equivalent crept up 0.02 percentage point, shrinking the interest rate differential to 0.8 percentage point. The reason for this is that many players expect European and US rates to be raised, while hoping that Norwegian key rates will be lowered further. Norges Bank lowered interest rates by 2.5 percentage point in 1999, and this, together with a higher oil price and rise on foreign bourses, was the main reason for the price surge on the all-share index in 1999. Turnover in the bond market trails turnover in the stockmarket. The volume traded averaged NOK 2.33 billion daily in December, NOK 3.27 billion in 1999 and NOK 4.51 billion in 1998.