OSE on Steady Course after Rough '98
A surge in stock prices in the second half of December last year did not prevent 1998 from being the poorest of the last 16 years of the OSE All Share Index. The all-share index fell 26.7 per cent in 1998 after five consecutive years of rising share values. The OSE shipping index (which includes offshore shares) fared even worse. It plummeted 45.5 per cent after a solid gain of nearly 40 per cent in 1997.
For the Oslo Stock Exchange the financial crisis in Asia and the oil price had a disproportionate influence on the indices. It has a larger proportion of oilrelated and shipping shares than the average European stock market to explain this phenomenon. Generally all shares suffered from other adverse factors such as rising interest rates and a falling krone.
A look at the maritime sectors on other stock exchanges around the world shows that the performance of shipping shares elsewhere has not fared any better than those listed in Oslo. However, the high proportion of maritime or oil-related companies listed in Oslo, meant the OSE was hit particularly hard.
Are there any signs of recovery? Yes there are. From being one of the weakest performing European stock exchanges in 1998, the OSE so far in 1999 have turned into the second best performing stock exchange in Europe, behind Helsinki.
At the end of the first tertial this year many of the "fundamentals" seem to be back. The oil price is at USD 15; interest rates are down about 1.5 percentage points; and the krone has strengthened. The market has responded: shipping and offshore shares by + 25 per cent at the end of April; compared with + 21 per cent for the total market. Shipping shares like Bona Shipholding, Stolt Nielsen, Jinhui, Ganger Rolf, I.M. Skaugen and Odfjell, and offshore shares like Stolt Comex Seaway and Smedvig have increased their value by more than 60% so far this year.
Leaving the current market situation, I would like to focus on other fundamentals which remain unchanged despite the recent period of turbulence.
First, attracting listings from the shipping and offshore industries is still a declared priority for the OSE. This priority is logical given the importance of the shipping and offshore sector to the OSE and to the Norwegian economy.
Secondly, the Oslo market remains a unique and attractive one for international shipping and offshore companies thanks to the expertise of the entire market environment: Oslo is alive with a community of skilled professionals ranging from investors to analysts, stockbrokers to shipbrokers, bankers to lawyers, insurance companies to ship lending institutions, shipyards to the Norwegian International Ship Registry (NIS) and even the class society Det Norske Veritas.
Oslo's many analysts and stockbrokers are very knowledgeable about the specialist maritime areas and are world renowned for this. Many brokerage firms have their own specialist shipping, cruise or offshore analysts.
The commitment to the maritime by the various participants in the financial market in Oslo was proven when the OSE, together with the Norwegian Society of Financial Analysts (NFF), arranged a one-day Tanker Market Conference in Oslo in March this year. The conference was very well attended by more than 150 analysts, investors, shipowners, bankers, journalists and others. For the Oslo Stock Exchange, playing a role in such arrangements, promoting a higher level of knowledge about OSE listed and other maritime companies, is a natural consequence of our maritime strength and priority. Moreover, at the OSE we interpret the stock exchange's role as a meeting point between companies on one side and investors on the other, to include something more than providing access to an electronic equity trading system alone. By utilizing proactive efforts, our aim is to continuously improve the quality and liquidity of the Oslo stock market and so increasingly attract and retain companies, investors and investment banks to the market.
Another maritime product of this thinking is the Ship Finance Forum Oslo, which will take place for the first time in June this year. The Forum has been created to provide an unbiased platform for shipowners, operators, investors and financiers to discuss the most dramatic trends and issues effecting the ship finance industry. A further idea behind the Forum is to place an international focus on the unique shipping and shipping-finance infrastructure that exists in Oslo. This year's Forum will concentrate on the availability of capital and the aim in this context is to assist owners to match the right financing source with the right project.
Set against this background, at the threshold of the new millennium, the OSE is set to play an active role in the future in the Norwegian capital market in general, and the maritime sectors in particular. The technical foundations are in place with the new state-of-the-art Equity Trading System successfully introduced in February this year. The new trading system has increased market transparency and made remote memberships possible. In addition, the OSE is currently preparing to offer multi-currency trading to customers in the near future. At the OSE the emphasis on customer needs — both investors and issuers — continues to be a driving force and will lead the way in to the new millennium.