Shipping shares soar on the Oslo Stock Exchange

Revenues and the trading rate of shipping shares on the Oslo Stock Exchange more or less doubled in February compared to the same month in 2013.
Photo: Oslo Børs
Photo: Oslo Børs

Shipping shares on the Oslo Stock Exchange were on fire this February, with both revenues and the number of trades almost doubling compared to February 2013.

Revenue in the transport sector, which consists primarily of shipping shares, increased by 104.2 percent, and the number of trades increased by 82.9 percent compared to the same month last year.

The significant activity indicates that investors have become more confident in a impending industry rebound, and they are now acting accordingly, says analyst Herman Hildan of Norwegian RS Platou.

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"People are becoming increasingly confident that the shipping markets are returning. It's a cyclical industry, and we're now headed toward a few years with a strong market, and people are position themselves according to that," says Herman Hildan.

Herman Hildan also points out that the recent has been far more positive due to increasing rates. And this attracts investors.

"I'll quote one of the most successful men in the history of shipping, Greek Onassis, who said that: 'You have to accept that the seas never rest.' And it's the same in shipping in terms of activity. When the market is good, people will be there. We are looking at two or three years with somewhat limited supply, and people are comfortable with the market balance and position themselves according to this," he tells ShippingWatch.

And it is no coincidence that shipping shares are soaring on the Oslo Stock Exchange, he says.

"The characteristic thing about the Oslo Stock Exchange is that the process of raising money is much shorter than on other stock exchanges, where the processes are more protracted. This makes Oslo Stock Exchange an attractive place to raise capital. And we're currently in a growth phase, where the companies want to build fleets and positions themselves so as to be ready for the rebound," says Herman Hildan.

Oslo Stock Exchange agrees

"Oslo Stock Exchange attracts both companies and investors due to its international position as the leading shipping exchange," says Geir Harald Aase, Head of Communications at Oslo Stock Exchange.

He also points to the high number of foreign investors. In 2013, foreign investors accounted for 37 percent of all the assets listed on the stock exchange.

"And because Oslo Stock Exchange is the leading shipping exchange in Europe it also attracts many foreign investors for these assets," he says.

The companies in the transport sector include shipping magnate John Fredriksen's Golden Ocean Group, Stolt-Nielsen, Western Bulk, and American Shipping.

The transport sector accounts for five percent of the Oslo Stock Exchange revenue, where the largest sector continues to be the energy sector, which is responsible for 38 percent of the revenue.

However, activity in this sector was far lower, with a growth in revenue of 12.12 percent, and a growth in trade rate of 7.98 percent.

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