Oil giants, stock exchange locomotives and car shipping companies release results in a jam-packed week at Oslo Børs. Norwegian price growth and the Swedish interest rate meeting are helping to round off towards the weekend.
Most of the sectors on Oslo Børs are represented when, among others, Equinor, DNB and Yara present figures for last year’s fourth quarter in the coming week.
– As usual, the focus will be on whether they deliver on expectations and whether there is anything new in their market outlook, says portfolio manager Janne Kvernland.
She is a manager in the Norwegian equity team at Alfred Berg Kapitalforvaltning.
During the results season, Kvernland particularly monitors factors such as the impact of inflation on the companies’ sales and margins, and cost overruns on investments.
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– Commodity prices fluctuate a lot – how have those who are exposed to it maneuvered this quarter, asks the manager.
She is also concerned with things such as changes in customer behavior and companies’ guidance at the end of the results season.
– The companies’ order book is a good indication of the temperature, so here you can hope for good numbers, she adds.
In addition, she follows comments about tax – and especially within the farming industry now.
Equinor is leading a profit rush
The first truly jam-packed week of this results season is now upon us. Several of the very largest companies on the Oslo Stock Exchange present their figures for the fourth quarter.
Equinor, Aker BP, DNB, Yara, Kongsberggruppen, Storebrand and Nordic Semiconductor are some of the names on the long list of companies that will be in the profit fire. Car shipping companies Wallenius Wilhelmsen, Gram Car Carriers and Höegh Autoliners also release figures on a continuous basis.
In Equinor’s case, a result of NOK 144 billion is expected, according to forecasts the oil giant has obtained from analysts who follow the company. It is weaker than the record result in the third quarter, which was lifted by soaring gas prices and high oil prices.
High dividends are also expected on the Oslo Stock Exchange after a 2022 with high commodity prices, E24 has previously mentioned.
– There will be massive dividends this spring. It is the raw materials sector in particular that drives up the average. Elkem and Hydro will be fine. The oil companies will do very well, said portfolio manager Leif Eriksrød at Alfred Berg recently to E24.
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The airlines are also in focus, even if there are no quarterly results. SAS and Norwegian both present their traffic figures for January at the beginning of the week.
Outside of Norway, things are a bit quieter from the biggest companies, after several American tech giants have done away with their figures in the last couple of weeks. Names such as Disney, Softbank and Uber are still on the results poster.
Expect inflation jump
While the week was jam-packed with both foreign interest rate hikes, US job figures and Norwegian house prices on the macro side, things are a little quieter on that front in the coming week.
The price development in Norway will nevertheless be concluded on Friday, when inflation figures for January are presented.
It is expected that price growth in this country, measured against the same time last year, will climb slightly again, after it moderated to 5.9 per cent in December. The consensus among economists is that inflation will land at 6.3 percent in January, according to figures obtained by Bloomberg. Core inflation, which measures price growth excluding energy and tax changes, is expected to climb to 6 percent.
DNB Markets is among those who believe the jump in inflation will be even stronger than that, with inflation of 6.9 per cent and core inflation of 6.1 per cent. The brokerage also points out that January is normally a month where surprises can arise.
– In contrast to the typical January trends, we expect a smaller increase in clothing and furniture prices and a sharper increase in rent, the brokerage house writes in an update.
Power will also contribute to the jump for more technical reasons, DNB Markets believes. The electricity subsidy was increased in January last year. This means that comparisons are made with lower electricity prices this month than in December, because Statistics Norway takes electricity subsidies into account when the consumer price index is prepared.
Sweden can overtake Norway
In Sweden, the stage is set for an interest rate decision on Thursday.
The broad expectation is that Sweden’s central bank, the Riksbank, will raise interest rates by 0.5 percentage points to 3 per cent. In that case, it will take the interest rate level in the neighboring country past the Norwegian rate, which is 2.75 per cent.
– Since the November meeting, inflation excluding energy has risen slightly more than the Riksbank’s estimate, the Swedish krona has weakened and the outlook for international interest rates has increased. Although recent data show falling activity, we believe the Riksbank will continue to respond strongly to upside surprises on inflation, writes DNB Markets analyst Oddmund Berg in a note.
How the British economy fared towards the end of last year will be answered when GDP figures are presented on Friday. The analysts expect an unchanged development for Great Britain’s gross domestic product in the fourth quarter.
