2001 has in many ways been a difficult year for market players, with prices fluctuating in step with the mood of the moment. Shares as an investment medium took a tumble - both here in Norway as elsewhere - for one thing as a result of the problems in the wake of 11 September with ensuing revenue losses and lay-offs at a number of major companies. IT and telecoms shares continued their slide from the previous year, and global stockmarkets waited and waited for the downturn to bottom out. The Norwegian securities market witnessed two liquidations in the year, unusual among Norwegian listed companies. Even so Norway got off fairly lightly compared with our neighbour Sweden and major financial centres in the UK and Germany where listed companies had a far harder time.
Second weakest ever
Only once in the past 20 years has the value of shares on Oslo Børs fallen by a greater margin than in the year behind us. That was in 1998 in the wake of the Asian crisis when oil prices fell below 10 dollars a barrel and Oslo Børs tumbled 26.7 per cent. Since the bourse first established a benchmark index in 1983, however, the value of shares has risen by about 1,200 per cent, showing that historically speaking shares have produced very high returns as an investment medium.
Many observers are uncertain about stockmarket prospects in 2002. While some expect lost assets to be recovered, others are worried - for one thing because of Japan´s economic crisis. The world´s second largest economy is struggling, and it is widely believed that fundamental reforms are needed to get the economy back on track; only then will global stockmarkets be able to look forward to a broad-based recovery. And it remains to be seen how long the US economy takes to regain momentum. Here in Norway new interest rate cuts could stimulate investment in equities, although it is abundantly clear that the outlook for Norwegian shares depends in large measure on the state of the world economy.
Reasonable activity
While stockmarkets on a global basis have been far quieter than in the record year 2000, turnover for the year as a whole in the Norwegian market has been reasonable compared with last year. Shares worth an average of NOK 2.3 billion changed hands daily in 2001 compared with NOK 2.4 billion in 2000. The number of trades continued to rise to 10.135 on daily average basis. Telenor´s and Statoil´s market debuts undoubtedly resulted in increased trading, but liquidity has nonetheless been reasonable apart from in quiet summer months and the turbulent autumn. Not surprisingly the lion´s share of trading is down to the major companies with the 25 most traded shares on the bourse accounting for as much as 80 per cent of the overall turnover of NOK 565 billion.
Broad decline - led by IT
While most industries found 2001 heavy going, IT shares mark themselves out in negative territory. The IT index fell as much as 25 per cent, with Merkantildata, Eltek, Nera, Opticom and EDB Business Partner leading the decline. Merkantildata lost as much as 69 per cent after profit warnings and loss of market confidence.
Several of the bourse´s blue chips also performed poorly, as clearly witnessed by the OBX index which fell back 17 per cent. This index contains the 25 most traded shares on Oslo Børs. Among those that tumbled furthest was the reverse-vending-machine company Tomra, after much back and forth about whether Germany would introduce a deposit on beverage containers. Germany´s decision, when it comes, is seen as a strategically highly important one for Tomra which dropped 50 per cent in the course of the year.
Among major companies that checked the above trend was RCCL which, together with the majority of companies in the travel and tourism industry, dropped sharply after the terrorist attacks in the US. Consolidation in the industry also sparked uncertainty for RCCL towards year-end with the company losing 39 per cent of its assets.
Orkla, Schibsted and Frontline also slipped back 12, 18 and 22 per cent, while Storebrand and Den norske Bank both lost 15 per cent. Statoil experienced a fairly tough first half-year as a listed company, although steep oil price falls have to take much of the blame for the 10 per cent reduction in value of this company, the biggest on the bourse. Statoils reduction is, however, smaller than for several international oil companies in the same periode. The oil price has incidentally been highly volatile in the past year, fluctuating in fact far more than in 1998 when oil-related shares really took a tumble. Telenor has managed creditably in its first year on the bourse compared with several other of Europe´s telecoms companies. Telenor starts the new year with a price of NOK 38.60 per share, which is 0.5 per cent higher than year end 2000.
Tandberg supreme
The video conferencing company Tandberg was the year´s crystal-clear winner with a price rise of as much as 147 per cent. Paradoxically most of the advance was in the period after 11 September when the share price almost doubled. Fear of flying after the terror strikes brought substantially increased sales of video conferencing equipment, and Tandberg´s shareholders truly felt the benefits. But Tandberg was not alone on top of the winners list. The small IT company Norkom also raised 147 per cent, which place the Sandefjord-based company on the top with Tandberg.
Braathens, the airline, also ended well up the list after the acquisition by its competitor SAS. Shareholders can book a price increase of 76 per cent. Among the big companies we also find InFocus, Amersham and Elkem on the list of the more than 60 shares that rose in value over the year. Around 150 shares fell in value and, in addition to the demise of Enitel and Customax, companies such as Stepstone, Fjord Seafood, Kværner and Eltek lost 97, 85, 86 and 78 of their asset values.
Liquidation spectre came to Norway
Being wound up is a rare event for companies on Oslo Børs, but in 2000 two suffered this fate. The first was Customax which was placed in receivership on 15 June. But the one to receive greatest attention was Enitel which started winding-up proceedings on 29 August, only to be delisted two days later after its shares had nose-dived throughout the year. The acquisition of Telia Norge shortly after its market debut is presumed to be one of the main reasons for Enitel´s collapse.
And Kværner, tormented by the spectre of liquidation throughout the autumn. It all began on 19 September when Kværner shocked the entire market by owning up to an acute liquidity crisis. A tough struggle for survival continued for two months, with the company´s board and leadership in constant talks with banks and the biggest shareholders. The Russian Yukos Oil entered the scene at an early stage and was perceived by many as a life-saver - until Kjell Inge Røkke and Aker Maritime came up trumps towards the end of November. Over the year the Kværner share fell 86 per cent, and the group´s market value was reduced to less than NOK 1 billion.
