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With the first half of 2023 completed, the market is anxiously waiting for results for the second quarter, which will arrive on a conveyor belt in the coming weeks.
Where have the companies been hit by ever-increasing prices? How have the companies handled weakened purchasing power among customers? Is pessimism prevailing?
These are just some of the questions that may be answered in the coming weeks.
– So far, the companies have managed to pass the cost increases on to the customers. The key further will be whether they still have the ability to set prices or have to cut costs, says chief strategist Anders Johansen at Danske Bank, and adds:
– We almost have to hope that the companies will soon start laying off employees. As long as it is still the case that companies are able to keep employees, it means that the central banks have room to continue raising interest rates.
Shipping and finance
First among the companies on the Oslo Stock Exchange is the shipping company Stolt-Nielsen, which has risen over 40 percent on the stock exchange in the past year, but a modest five percent so far in 2023.
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In the first quarter, however, both revenues, operating profit and net profit increased markedly from the same quarter last year, which the company itself attributed to, among other things, higher rates.
The shipping company presents its second quarter results on Thursday morning, before ABG Sundal Collier follows on Friday.
ABG has had a tough time
After the first three months of the year, the brokerage house had to note a fall of more than 30 per cent in profit before tax, which ended up at NOK 87.4 million. On the top line, revenues fell by 12 per cent.
There is little doubt that the last year and a half has been challenging for the brokerage house, which saw revenues fall by 40 percent in 2022. The euphoria in the financial markets after the corona and in 2021 has subsided, and in the last quarter alone we have witnessed a handful of strong discounted issues on the Oslo Stock Exchange – in addition to far fewer transactions.
For ABG, the lower activity has a direct impact on earnings.
Hoping for higher unemployment
Leif-Rune Rein, investment director at Nordea Liv, believes the situation looks relatively similar to the start of the previous reporting season.
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– A fall of 5.1 per cent was then expected, while it ended up at 0 per cent. Now a fall is also expected, this time of 5.7 per cent. If it surprises in the same way as last time, it may be that there will be a similar outcome.
Investment director Leif-Rune Rein at Nordea Liv is excited about what the report on American employment is going to say on Friday. (Photo: Mikaela Berg) More…
Johansen believes the chance of a hard landing, i.e. a severe economic downturn, increases as long as interest rates remain high.
– Higher interest rates work, but the effect has proven to take longer in this cycle. It is not only to do with the fact that unemployment has remained low, but in many countries an expansionary monetary policy has been pursued at the same time that the central banks have tightened, he says and also points out that higher interest rates have meant that the second-hand housing market, especially in the USA has stopped completely.
On Friday this week, the US employment figure, often called “the most important figure of the month”, will also be released. Investment director Rein expects a strong report, if not as strong as in June, when analysts all over the world were very surprised by the 339,000 jobs that were created in May.
– Now a figure of 225,000 is expected, which is also strong. There is no major cooling in the labor market, and confirms the picture that things are currently going stronger than expected.
Rein explains that the American labor market is still overheated and hopes that it will calm down somewhat in the future, so interest rate hikes do not continue at the same pace.
Labert on the Stock Exchange
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When trading opens on Monday morning, the market will embark on the third quarter of 2023, a quarter which in the last ten years has produced mixed development.
The best third quarter in the last ten years came in 2017, when the main index on the Oslo Stock Exchange rose 12 per cent, while the weakest third quarter in the same period produced a negative return of 7.5 per cent in 2015. It should be mentioned that the third quarter contains a summer period where the trading volume is traditionally lower than at other times of the year.
2023 has so far been a mixed year on the Oslo Stock Exchange, where the main index finally ended the first half with an increase of 2.1 per cent. However, it has been very up and down, with the bottom point coming at the end of March when the main index had fallen almost four per cent for the year.
The second quarter ended with an increase of 1.7 per cent. Leaving aside 2022, when Russia’s invasion of Ukraine sent shockwaves through the global financial market, the second quarter of 2023 was the weakest since 2019. (Terms) Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.
We spend less money on restaurants, hotels and other services: – It is disturbing
It may appear that the economy is finally biting the central bank’s persistent interest rate hikes and higher inflation, but this is not necessarily good news.
01:04
Published: 19.06.23 — 02:15
2023-07-02 17:07:03
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