The Norwegian Stock Exchange, Oslo Børs, is working hard to promote its advantages to the rest of the world. Well positioned in a number of attractive market segments, Oslo Børs will continue to build on its strengths to turn the challenges of being a small exchange into successes on the international stage.
Oslo Børs has shown the fastest growth in the Nordic countries both in terms of number of transactions as well as related to sales volume. The growth of foreign companies listed is reflected in this trend as well, with the number of foreign companies listed on the Oslo Børs growing by approximately 10 to 15 percent each year. The dynamic positive change in liquidity on the Oslo Børs has also been a major factor in attracting foreign interest. Since 1999 the number of daily trades on the exchange has increased by 1,100 percent to almost 50,000 per day!
Advantages of listing on Oslo Børs include the fact that the exchange offers a dynamic, professional environment where companies large and small can gain the attention that they deserve. The size of the Oslo Børs allows it to provide more focus on individual companies, and companies have responded positively to this focus. The numbers tell the story – in 2006, Oslo Børs ranked number four in Europe in numbers of new companies listed, only slightly down from the number two ranking in 2005.
Cost Efficient Nordic Cooperation
Oslo Børs stimulates an excellent environment in a number of ways, including cooperation with the other Nordic and Baltic exchanges. This has resulted in a common trading system and has harmonized trading rules between Oslo Børs and the exchanges in Rejavik, Stockholm, Copenhagen, Helsinki, Tallinn, Riga and Vilnius.
This has made Nordic and Baltic securities far more reachable to investors around the world, through only one single point of access. The objective is to exploit synergy benefits through increased distribution and improved cost-effectiveness that arise from economies of scale. This cooperation is a manner to attract and retain investors, issuers and brokerage firms by meeting their needs for simplicity, accessibility and cost-effectiveness.
In recent years, Oslo Børs has shown the fastest growth of all Nordic stock exchanges.
Trading Easily & Effectively
There are other ways that Oslo Børs is making it easier to trade. These include the creation of a dedicated SMS number that provides stock exchange information, allowing users to access real time information directly from their cell phone. In addition, ongoing efficient trading and settlement procedures, excellent consistent capacity and state of the art operative systems make this exchange one of the most dynamic and accessible in the world. Investors can also subscribe inexpensively to real time information from international finance information suppliers such as Reuters and Bloomberg.
The high level of activity on the exchange is a good indication that Oslo Børs is on the right track. The years 2005 and 2006 saw the trading value and number of transactions in the equity market increasing by 60 to 70 percent each year. In comparison with other exchanges, Oslo Børs has also seen excellent returns on capital both in absolute and relative terms.
Home to World Class Analysts
One reason for this attraction to the Oslo market is the fact that there are excellent information environments within a number of sectors that include seafood, shipping, energy and oil. Many companies within these sectors find a home here on Oslo Børs, in no small part due to the very capable and professional analysts that facilitate successful investment activity. For example, member brokers such as Carnegie, ABG Sundal Collier and Pareto are leaders within the area of oil sector analysis and provide important information to investors concerning the direction of the Norwegian sector as well as the international oil business.
Morgen Stanley became the first large foreign member of the Oslo Børs just seven years ago in 2007. Now, more than one half of its members are foreign brokers, including Morgen Stanley, Lehman Brothers and Merril Lynch. In fact, there are now more foreign members than Norwegian members. These and other member brokers of the Oslo Børs know the importance of working with the exchange for keeping the Oslo market internationally competitive.
Glitnir Securities is one Oslo Børs member with an expert team offering services and support related to credit, equity and other client needs. The company’s main focus relates to three main investment sectors: seafood, oil and energy and the ever-growing alternative energy market. In the long-term, Glitner knows that the future will focus increasingly on the alternative energy sector, and not surprisingly is finding that the international market often looks to Norway for environmental initiatives – including investment opportunities.
The clear trend shows that not only is the Oslo Børs becoming a very attractive destination for companies wishing to be listed on the exchange – these companies are also getting much attention from foreign investors who appreciate the focus, expertise and added-value that the Oslo Børs and its members can bring to the international investment market.
Oslo Børs has a focus on profitability and professionalism and puts social responsibility as a top priority. Changes in the regulatory framework are creating challenges for stock exchanges, and the Oslo Børs is taking the lead in implementing improvements that will continue to make stock trading more transparent, consistent and effective.
Transparency and responsibility are also important for Norwegian investment companies as a whole, including the Fund Management Group (FMG), a company that works globally in identifying asset managers with proven track records and excellent growth potential. FMG assigns local asset managers who are well informed of a particular country regarding its economy, culture and market segment to invest directly into a local market. This goal is a win-win situation for both investors as well as the local companies. FMG looks at the SRI (Social Responsible Investment) factor as one of the criterion in the selection process.
Monitoring of international developments and maintaining a transparent, secure and efficient market is a priority for the Oslo Børs. This is also one focus of companies such as DLA Piper, a global law firm located in Oslo. DLA Piper experiences a high level of foreign interest particularly within the oil and gas as well as mining and fishing sectors. These companies are attracted to the Oslo market for analyst expertise, eager investors and access to capital. DLA Piper works with many of these companies seeking either a stock exchange listing on Oslo Børs or a listing on the authorized market place, Oslo Axess.
A number of DLA Piper clients see that Oslo Axess in itself is a good market place, or use this as a platform to help them achieve listing on the Oslo Børs. Oslo Axess opened for listing of issuers in May 2007, and also welcomes developing companies in a pre-commerical status, allowing less stringent listing requirements than direct listing on Oslo Børs. However, companies listed on Oslo Axess will be subject to the same continuing obligations vis-à-vis the market place and investors as companies listed on Oslo Børs.
In practice, the most important differences are that there are no requirements for historical financial reports (apart from one interim or annual report) and the issuer does not need to have more than 100 shareholders. Further, the market cap requirement is normally not an issue for any company seeking a listing.
Getting the Word Out
To support the marketing efforts that spread the word about the Oslo Børs and investment opportunities, the exchange arranges capital market days in close cooperation with investment firms and companies listed on Oslo Børs. These capital market days are staged in various international markets as well as in Norway.
In addition, Oslo Børs marketing and press personnel often travel from Norway to the far corners of the globe in order to work with potential companies who might consider listing themselves on the Oslo Børs. These activities include participating in industry seminars that the exchange considers to be important and is one key in recruiting new companies to the exchange.
The Canadian Connection
But marketing efforts do not stop there. In 2005 an entourage from the Oslo Børs visited Canada in order to discuss the Oslo Børs listing possibilities with several Canadian companies. The result was that a group of companies, including the oil companies Artumas Group and Questerre, joined the Oslo Børs in 2006.
Oslo Børs listing financed a high impact Questerre gas project in northern Canada.
Questerre Energy Corporation is a Canadian based E&P company with a portfolio of high-impact projects in frontier Canada. The Company’s common shares are listed on the Oslo Børs as well as the Toronto Stock Exchange in Canada. Key Questerre personnel have been involved with Oslo Børs and the Oslo investment community since 1998 as founders of CanArgo Energy, an international E&P company listed on the Oslo Børs and AMEX. Leveraging these relationships, in 2005, Questerre selected Oslo Børs to increase its market exposure to both retail and institutional investors in Europe as well as to provide liquidity to its existing Norwegian investors.
Michael Binnion, President and Chief Executive Officer of Questerre, comments, “The energy focused market and entrepreneurial spirit in Oslo was an excellent fit for Questerre with its business plan of pursuing high-impact frontier projects. We currently enjoy a strong following from several brokerage firms with excellent liquidity. We have raised in excess of USD 40 million in equity since listing in 2005 and our average daily trading volumes this year are over 800,000 on the Oslo Børs as compared to 72,000 on the TSX.”
Mr. Binnion further comments, “As opposed to many over the counter markets, Oslo Børs is a full stock exchange with state of the art trading and surveillance systems. A strong code of practice for corporate governance, low annual maintenance costs, and clear concise rules and regulations made it the ideal choice for Questerre as a foreign issuer seeking a secondary listing.”
International Success Stories
Questerre is not alone as a foreign company enjoying success on the Oslo Børs within the oil sector. PA Resources is a Swedish oil and gas company formed in 1994 through the purchase of the oil company Petro Arctic Svalbard from Norsk Hydro. The company is now one of the largest oil producers in Tunisia and is also well represented in Equatorial Guineau. Listing on the Oslo Børs has not only communicated that this is a successful company in the global oil and energy environment, it has also positioned the company in the process where the Norwegian government pre-qualifies both licensees and operators as a means of bringing competent new players to the Norwegian continental shelf.
One of the reasons that the Peruvian company Copeinca chose listing on Oslo Børs in 2007 was the strong global reputation that Norway commands within the seafood industry. The high profile presence of analysts and industry experts also has helped Copeinca in maintaining its solid international profile. This builds well upon Copeinca’s strength as a major company in Peru, a country that enjoys the status as the world’s largest exporter of fish meal and fish oil.
Jinhui Shipping and Transportation Ltd. is a Singapore-based company engaged in ship chartering, ship owning, trading and investments. The company has a wide range of global, private and institutional investors, and it has enjoyed a full listing on Oslo Børs since October 1994, providing the company with a higher profile within the lucrative shipping sector.
Join the Winners
Companies such as Questerre, PA Resources, Copeinca, Jinhui and many others know that Oslo Børs is fully committed to complementing their strengths and qualities in providing a solid base to attract investors, gain access to analytical expertise and be a part of the Oslo Børs success story. With its fast growth, increasing sales volume, accessibility, and, not in the least, transparency and professionalism, Oslo Børs is the place to be for future opportunities.