Oslo Stock Exchange Monthly Report: February 2000: Locomotives sidelined by IT

Whereas the IT index jumped 18.7 per cent in February, traditional Norwegian manufacturing shares sagged. The all-share index climbed 3.4 per cent on record trading. Equities trading has skyrocketed since the new trading system went live last year. January´s record figures have already been hammered. In February 11,870 trades worth NOK 2,582 million were transacted daily, compared with 5,280 trades (NOK 1.77 billion) last year and 9,367 trades (NOK 2,582 million) in January. Trading so far this year already on a par with the full year 1994 The biggest increase is in the number of trades. On the present trend last year´s record will be surpassed in June. Online trading accounts for an ever-increasing share of stock exchange business. A nervous market and large price movements are further contributory factors. The high level of activity in the stockmarket is reflected in the derivatives market. A new record was set for the third month running: 26,083 option contracts daily, compared with 14,532 in 1999. Kreditkassen and Merkantildata were the most popular share options. 3,517 option contracts and 2,417 futures contracts were traded on the OBX daily. IT shares performed best both in terms of the number of trades and price. Carnival and Star´s acquisition of NCL made NCL the most traded share in February, followed by Merkantildata, Norsk Hydro and Netcom. Where the number of trades is concerned, the list is topped by IT shares: Merkantildata, Nera, Iterated Systems and Norman. EDB Business Partner played the biggest part in the rise of the IT index, putting on 77 per cent in February. Its market value rose NOK 5,101 million to NOK 10,253 million, putting its market capitalisation ahead of old-timers such as Kværner, Elkem and Dyno. Much of its upturn is due to the acquisition of Fellesdata The Schibsted media company´s price rise illustrates the enthusiasm for the "new economy". Plans for Schibsted.com and stock exchange listing of the Scandinavian Online gateway pushed the Schibsted share up 64.4 per cent. E-Line Group is another example. This company, previously known as Motegruppen and now pinning its faith in Internet commerce, rose 76.7 per cent in February. Iterated Systems is also riding the Internet wave, putting on 81.9 per cent in February. Teco Maritime rose 49.5 per cent after announcing its intention to open an online trading house. Companies from the "old" economy put a brake on the all-share index in February. Having risen steeply last year, prices for a number of commodities, including aluminium and other metals, dipped sharply in February, with aluminium dropping almost 8 per cent. The commodity shares Elkem and Norske Skog A fell 7.9 and 10.8 per cent respectively. The oil price remains at a record level, but without boosting the Exchange´s biggest company, Norsk Hydro, which dropped 4.7 per cent last month. Norway´s second largest listed company, Orkla, was also out of line with the market, falling 3.8 per cent. The Norwegian picture is mirrored in the USA where the hi-tech bourse Nasdaq rose 19.2 per cent while the Dow Jones, which measures the price trend for 30 major industrial companies, dropped 7.4 per cent. In Europe bourses with a large number of IT shares made the best showing in February. In Stockholm Ericsson helped to push up the general index 15.9 per cent. Helsinki´s general index put on 8.7 per cent. In comparison the FTSE 100 fell 0.6 per cent. Among the leading bourses Stockholm has shown the best price performance so far this year with a price rise of 18.5 per cent. The Nasdaq has risen 15.4 per cent. Our all-share index is 1.2 per cent higher than at New Year. Behind the all-share index we find the FTSE 100, which has dropped 10.1 per cent, and the Dow Jones, which is down 11.9 per cent. RCCL plunged 27.7 per cent in February after presenting performance figures, and helped to push down the shipping index 6.7 per cent. NCL´s price fall also weighs heavily. Star Group now controls more than 95 per cent of NCL stock. However, several oil-related shares pulled in the opposite direction, dampening the shipping index´s fall. Most companies have delivered results in line with expectations, or better. Both DnB and Kreditkassen performed well and ensured a price rise for the financial index. Storebrand, however, held this index back with a price fall of 7.3 per cent in February. Tomra announced better-than-expected figures and rose 49.3 per cent. Nycomed Amersham was also popular. A greater international focus on biotechnology shares and sound 1999 results pushed up the share 26.9 per cent in February. Never before has the issue volume been so high in the first two months as this year. Listed companies have brought in a total of NOK 2,968 million so far this year, NOK 1,942 million of this figure in February. EDB Business Partner accounted for the biggest issue of NOK 945 million. A new company was admitted to listing in February: Helgeland Sparebank. The Stock Exchange Board decided to admit Stepstone, but listing has yet to take place. Techmar Technologies, Bergensbanken, Elkjøp and Aker RGI were delisted in February, reducing the number of listed companies to 213. The longest interest rates followed European rates´ downward path in February. The effective yield on Norwegian 10-year government bonds (S468) fell 0.6 percentage point. The equivalent German rate dropped 0.4 percentage point, thereby narrowing the differential to 0.8 percentage point. The effective yield on shorter Norwegian maturities has risen, however. The yield on the one-year government bond index (ST2X) rose 0.17 percentage point in February in light of the receding likelihood of a cut in key rates by the Norwegian central bank. Bond market trading remains slow. Bonds worth an average of NOK 2,361 million (excl. repos) were traded daily in February, compared with last year´s average of NOK 3,081 million. One reason for the low activity is the absence of central bank action to alter money market rates and a lack of incentive to trade.