2017 was an exceptionally good year for the Oslo stock exchange, with the Oslo Børs Benchmark Index achieving more than 50 new highs and climbing 19.1% over the course of the year.
The Oslo Børs Benchmark Index achieved more new highs in 2017 than in any year since 2005, with the best gain for the year as a whole since 2013. Based on its average annual return since 1996, in a normal year the Benchmark Index climbs 10%.
More new debt and equity capital raised than ever before
Furthermore, 2017 was also a record year in the primary market, with more new debt and equity capital raised in a single year than ever before. At 21 December, the combined total value of debt and equity capital raised was NOK 403 billion, which is NOK 47 billion or 13.2% more than in 2016, the previous record year. The large number of companies admitted to listing helped increase the amount raised in the equity market to new highs, with 21 companies admitted to Oslo Børs’ marketplaces in 2017, the highest number since 2007.
Dividend payments were also of record size in 2017.Record year for issues at Oslo Børs (article published on 22 December)
Surge in global economic growth
The surge in global economic growth pushed stock markets higher in 2017. The economic upturn has been broad-based, with growth stronger in some economies, such as the USA and Germany. This has been reflected by stock market indices – see the chart below.
Increase in the price of oil
The rising price of oil has been an important driving force in Norway. From a low of under USD 45 per barrel set in June, Brent crude has risen to its highest level since summer 2015. Shares in energy companies represent a third of the combined total value of companies listed on Oslo Børs. The increase in the price of oil helped the Energy Sector to rise by approximately 30% from its summer low, which contributed to the Benchmark Index achieving a series of new highs this autumn – see the chart below.
Salmon swimming against the current
At the start of 2017 the price of salmon was at a historic high, but over the course of the year it has fallen back to 2015 levels, which in turn has caused shares in seafood companies to fall. After rising 56% in 2016, the Seafood Index fell 5.4% in 2017 – see the chart below. Despite this, seafood has been the top-performing industry on Oslo Børs over the course of the last few years, with the Seafood Index having risen more than 500% since 2012.
Telenor, Norsk Hydro and DNB
Telecommunications services, materials and finance were the strongest-performing sectors in 2017 – see the chart below.
- Telenor was the company whose shares made the largest single contribution to the Benchmark Index’s increase in 2017. Telenor is the second-largest listed company and its shares gained 43.6% in 2017, sending the Telecommunications Services Index up 43.4%
- The rising price of aluminium helped shares in Norsk Hydro climb 55%, with the Materials Index climbing 31.6%.
- Banks and savings banks benefited from the upturn in the Norwegian economy, with shares in DNB, the third-largest company listed on Oslo Børs, generating a return of 23,5%. Storebrand and SR Bank climbed 49.7% and 48.2% respectively, helping the Financial Index to rise 25.8%
- Statoil and Aker BP are the two companies that have the greatest impact on the performance of the Energy Index. In 2017 Statoil rose 16%, while Aker BP, the next largest oil company listed on Oslo Børs, was up 35.9%. 2017 also saw shares in some oil service companies, such as Odfjell Drilling and Kværner, strongly reverse previous falls.
- A 22.6%rise in Orkla’s shares ensured the Consumer Staples Index remained in positive territory, despite falls in the shares of seafood companies weighing heavily on the sector.
- Schibsted and Kongsberg Automotive contributed significantly to the rise in the Consumer Discretionary Index.
- Hafslund, Scatec Solar and Arendals Fossekompani drove the increase in the Utilities Index.
- Shipping companies, Tomra and Kongsberg Gruppen made the greatest contributions to the rise in the Industrials Index.
- Atea made the greatest contribution to the increase in the Information Technology Index.
- Nordic Nanovector, Photocure and Biotec Pharmacon were significant factors in the fall in the Health Care Index.
Increase in share trading
More share trading took place in 2017 than in 2016, with an average of NOK 4.5 billion of shares being traded each day through 100,600 transactions. The former figure is 7.3% higher than in 2016, while the number of transactions represents an increase of 9.2%.
Source: Oslo Bors press release (29.12.2017)