'Børsen' takes another beating

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The Oslo Stock Exchange (Børsen) started the week with its worse pounding of the year on Monday, a sharp reversal from weeks of steady recovery. Analysts almost universally blamed the recent drop in oil prices, along with investor uncertainty. Telenor, faced with major trouble in Russia, fell again but not as badly as many other key Norwegian shares.

Earlier this month investors were cheering a rise by the main index of the Oslo Stock Exchange back over the 300-mark.

On Monday it sank an alarming 6.47 percent to just over 270, the biggest one-day decline so far in this roller-coaster year. Trading also opened Tuesday with prices down.

Some share issues took serious dives on Monday:

State oil company StatoilHydro,Norway’s biggest, fell 7.8 percent. With oil prices tumbling 5 percent just in the past week (from well over USD 70 to USD 66.60 for a barrel of North Sea crude on Monday), StatoilHydro suddenly isn’t as attractive. And since it’s a locomotive on the Oslo exchange, its fall contributed heavily to the decline in the index.

One analyst told newspaper Aftenposten that it’s seldom StatoilHydro falls so much in just one day. Another noted that too many foreign investors simply wanted out, and they drove the price down.

Offshore engineering firmAker Solutionswas also battered, down 9 percent, large offshore drilling companySeadrillfell 11.6 percent and tanker shipping companyFrontline(controlled, like Seadrill, by Norwegian tycoon John Fredriksen) logged the largest decline in actual kroner, down NOK 16.25 per share to NOK 159.25.

Telenor, threatened by a court-ordered sale of its shares in Russian mobile phone company VimpelCom, lost NOK 1.30 per share to close at NOK 45.05. The telecoms firm, Norway’s second-largest and also controlled by the state, decided to file a new appeal of the forced share sale, in an effort to stop any actual sell-off.

A court in Siberia confirmed on Monday that the share sale order had been sent to Russia’s State Property Agency, which has said it will take at least two months to sell the shares. The sale is meant to cover a compensation claim against Telenor that’s tied to its lengthy fight for control over VimpelCom.

“We intend to use all available means we have in this case,” Telenor spokesman Dag Melgaard told newspaper Aftenposten . At stake is the value of its investment in Russia, estimated at NOK 20 billion (more than USD 3 billion at current exchange rates).