On the other hand, it is gratifying to see a public flush with cash and willing to invest it in companies listed on the Oslo Stock Exchange. In March alone companies on the Exchange brought in NOK 4.7 billion - about one-third of the total for 1999. The growing interest in the Norwegian market is shared by non-residents who accounted for 32.3 per cent of shares held at month-end.
After several months of rising share values global stockmarkets now see signs of flight from what is often called "the new economy" back to traditional industry stocks. The phrase "money talks" is enjoying a new lease of life as investors are apparently no longer prepared to wait for profit to materialise. Despite IT shares´ plunge, the IT index is the only one to emerge on the upside so far this year with an advance of 12.6 per cent. A glance at the SMB index shows this to be due to small and medium-size IT shares which despite a 3 per cent fall in March have put on as much as 31.6 per cent in the year to date.
Opticom (-21.9%) and Merkantildata (-17.5%) were the main contributors to the IT index´s plunge. Proxima headed upwards, however, rising 46.3 per cent on the back of a planned merger with its arch rival, the American InFocus. Software Innovation and Agresso showed the biggest fall among hi-tech shares, losing 39.2 and 26.9 per cent of their value. The online recruitment company StepStone, which does not feature on the IT index, was caught up in the hi-tech plunge, and slid 64.8 per cent compared with its first quotation day on 14 March. The most likely reason for StepStone´s inauspicious start is competition from public and private sector job placement agencies at home and abroad.
Along with the shipping index, which rose 2.3 per cent, the financial index was the month´s best-performer. The three big players - DnB, Kreditkassen and Storebrand - all climbed in value, pushing the index up 2.8 per cent. Apart from the primary capital certificate (PCC) index, the financial index is none the less the weakest so far this year - down 2.9 per cent. While a change of government in mid-month had little impact on the market, stronger belief in the likelihood of Kreditkassen being sold to a foreign suitor or to Norwegian interests no doubt helped to push up financial shares. Where Kreditkassen is concerned, the Finnish-Swedish MeritaNordbanken prolonged its offer once again, this time to 28 April.
The Danish biotechnology company Medi-Cult had a fantastic month. Neither market players not the company itself can explain the very solid price advance of 466.7 per cent, but the fact that biotechnology is a popular industry and that Medi-Cult was among the stock exchange losers in 1999 could explain a lot. Medi-Cult´s bigger and more familiar colleague, Nycomed Amersham, put on a more modest 5.3 per cent in March.
Alvern also posted a good month with a price rise of 217.7 per cent. This company, specialising in petrol station advertising services, none the less remains the smallest on the Oslo Stock Exchange with a market capitalisation of about NOK 25 million.
Important events such as the OPEC meeting and decisions on the international interest rate policy front prompted a wait-and-see attitude on the part of stockmarkets across the world, bringing a reduced trading volume towards month-end. Even so, the Oslo Stock Exchange can point to a higher quarterly turnover than ever in the first three months of the year. The average daily volume traded in March came to NOK 2,670 million, while the daily average for the first quarter was NOK 2,738 million. This compares with NOK 1,428 million and NOK 1,296 million respectively in 1999. Although listed companies are issuing stocks as never before, Internet trading is becoming an increasingly important trading medium both in terms of volume and number of trades. In March 269,978 trades were transacted at a daily average of 12,271.
The OPEC meeting on 27 and 28 March was preceded by much expectation and speculation. Looking back, the OPEC countries seem to have succeeded in their aim of raising production without unduly affecting oil prices. At the end of March the price of oil for immediate delivery was USD 24.25 p/b, which is slightly less than two dollars below the price ahead of the OPEC meeting. At the beginning of March the price had exceeded USD 32 p/b for a brief period. Despite the uncertainty about the outcome of the meeting, a number of off-shore shares performed well in March. Smedvig and PGS, for example, climbed 19.6 and 12.6 per cent respectively. Tanker shares fared well for a while on the back of expectations of, and delight with, the production increases, and Frontline advanced 28.6 per cent over the month.
Compared with the international picture, March was a poor month for the Oslo Stock Exchange. In the USA the Dow Jones and Standard & Poor 500 rebounded with advances of 7.8 and 9.7 per cent respectively, while the Nasdaq led the IT downturn with a fall of 2.6 per cent. The FTSE 100 in London put on 4.9 per cent, while Helsinki´s general index rose 2.4 per cent despite an appreciable price fall towards the end of the period. Stockholm´s general index moved in line with the Oslo Stock Exchange. For the Norwegian market the month can be viewed as a correction to the first two months of the year when the all-share index was on a far more buoyant trend. While Oslo remains ahead of, for example, the Dow Jones and FTSE 100, we are some way adrift of our Scandinavian friends.
Analysts appear to agree that Norges Bank will raise its key short-term interest rates by up to 0.5 percentage point by mid-year. The fact that short rates rose 0.2 to 0.3 percentage point in March support this view. On the international front analysts have predicted interest rate adjustments fairly accurately, thereby pre-empting heavy swings in share values that could have resulted from higher EU and US interest rates. Predictable and resolute action by central banks takes much of the credit, and international long rates have also edged down. Here in Norway long rates shadowed the international trend.
In the Norwegian bond market, the daily volume traded (apart from repos) came to NOK 2,594 million. So far this year the daily average works out at NOK 2,504 million.
After record trading in the first half-month, turnover dropped sharply due to lower share trading. 467,747 contracts changed hands in the derivatives market over the month, averaging out at 20,337 per day.
