The Oslo Stock Exchange (Oslo Børs) has provided better returns for investors this year than any other stock exchange in the world. The small but financially mighty bourse reflects the effect rising oil prices have had on the resurgent Norwegian economy, and even the economic redevelopment of the neighbourhood surrounding it.
Surrounded by a fenced-in park in one of the oldest parts of the Norwegian capital, Børsen (as it’s called locally) literally finds itself in the midst of dramatic redevelopment on all sides. Not far away is the booming waterfront area anchored by the Opera House, the new Munch Museum under construction and the strip of semi-high-rises known as the “Barcode.” Just across the street, construction is underway on yet another new building, while its historic area behind the Akershus Fortress known as Kvardraturen is also undergoing rapid gentrification after years of being a gathering place for prostitutes and drug addicts.
Now the stock exchange itself is clearly benefiting from rising oil prices, which began this week back up above USD 82 a barrel. Newspaper Dagens Næringsliv (DN) also cited “favourable macroeconomic winds” that are blowing in the right direction so far this year.
Not everyone who has invested in stocks traded on the Oslo Stock Exchange has reason to uncork champagne bottles, DN noted over the weekend, but the best Norwegian stock funds have risen nearly 24 percent since January 1. The poorest have increased just 4 percent, with those doing the best reflecting an oil industry recovering from the oil price collapse in 2014.
The price of a barrel of Norway’s North Sea crude oil is up 22 percent so far this year, refueling strong activity in both the oil- and oil-service sectors. Companies within the Aker concern including the stocklisted Aker BP, Aker Solutions, Akastor, Kværner and Ocean Yield have all done exceedlingly well, with shares in the Aker investment firm itself up 87 percent. The Oslo Stock Exchange’s best-performing fund, Danske Invest Norge Vekst, invested in Aker, “and it has contributed the most to the good returns so far this year,” Lars Erik Moen of its manager Danske Capital, told DN.
The rise in other oil-related shares like Equinor and Aker BP has also boosted the Oslo Stock Exchange’s main index by 15.4 percent so far this year. “A year ago, we had much lower exposure to oil (shares),” Moen told DN, “but we saw that there was demand in the oil market that would exceed supply, and we chose to increase our stake in this sector during the year. It’s been a good choice.”
Local technology shares have also done well, with Moen pointing to a “nice gain” on Link Mobility Group’s acquisition, along with “fine development in Crayon Group and Nordic Semiconductor.”
Robert Næss, investment director for Nordea, noted that six oil-related firms have stood for two-thirds of the returns on the entire Oslo exchange, though. Some oil analysts have lately been predicting that oil prices will move up towards USD 100 again, which would generate more economic gains for Norway’s economy and its stock exchange.