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The main index on the Oslo Stock Exchange falls 0.8 percent at the opening on Friday. The spot price for North Sea crude oil, a central reference price for oil trading worldwide, rises slightly to over 93 dollars a barrel. On Thursday, the oil price was below 91 dollars a barrel.
A small wave of results washed over Børsen on Friday morning.
The mortgage company Tomra had a profit before tax of NOK 261 million, against the expected NOK 355 million. The company took a one-off cost of 120 million related to the cyber attack that hit the company a few months ago.
The Tomra share immediately fell 18 percent on Friday morning, and then the price drop accelerated. Tomra has become a filler on the Stock Exchange in recent months, partly as a result of market interest rates having risen sharply. Tomra now has a stock market value of around 27 billion, after the share has fallen more than 70 per cent from its peak.
– Tomra is a well-run company that has delivered ten percent annual earnings growth for the past 20 years. That’s really good, but it doesn’t justify that the company should have a P/E of 75 at the top, says Nordea’s investment director Robert Næss.
P/E stands for price/earnings, or price/earnings, a common measure of how expensive or cheap a share is. Growth companies like Tomra often want a higher P/E, but it has been far too high, Næss believes.
– Earnings 2021–2023 now appear to end up at the same level. There is no growth. After the decline, the share is now priced at a P/E of 26 with this year’s earnings. It’s still adult pricing.
Analyst estimates indicate that earnings will rise by 30 per cent next year, according to Næss. That would imply a P/E of 20 for next year, which isn’t bad for a company like Tomra, but the investment director notes that the market doesn’t necessarily believe the company will actually achieve that growth.
– On the negative side
A number of other companies presented figures on Friday morning:
The fertilizer giant Yara had a profit before tax of 12 million dollars, against a preliminary estimate of 313 million dollars. The share fell just over six percent. The insurance giant Gjensidige had a profit before tax of 1.1 billion, against the expected 1.3 billion. The result was characterized by bad weather and one-off costs, and the management is now unsure whether the company will reach the targets set for 2023. The share fell slightly from the start, but eventually turned up close to five percent. The paper producer Norske Skog had an operating result (EBIT) of NOK 36 million from a total turnover of NOK 3.04 billion. In advance, an operating profit of 113 million was expected, according to TDN Direkt. The share fluctuated between minus and plus, and ended with a small fall of 0.4 percent.
– In Norway, the results for the third quarter have been more on the negative side so far, notes Robert Næss.
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On Thursday, DNB fell seven percent after the company had presented figures for the third quarter. The result was strong, but the net interest margin and loss provisions were weaker than expected. On Friday, the share fell another 0.8 percent.
Argeo was smashed on the Stock Exchange and fell 50 per cent, to a price of NOK 3.6. The company carried out a private placement of NOK 250 million at a subscription price of NOK 3.2 on Thursday evening, corresponding to a discount of more than 50 per cent compared to Thursday’s closing price.
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Argeo conducts, among other things, seabed surveys and other underwater services. In connection with the issue, 78 million new shares were issued to new and existing shareholders, with the largest owner Kistefos (Christen Sveaas’ investment company) subscribing for NOK 52 million.
Powell on interest rates
The market is currently characterized by geopolitical unrest and strong interest rate movements. The US ten-year interest rate, often referred to as the world’s most important interest rate, reached close to five percent on Friday. The ten-year interest rate quickly fell back to 4.95 per cent, but it is still at the highest level since 2007.
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On Thursday evening, the head of the US central bank, Jerome Powell, repeated his message that inflation is still too high and that interest rates must be kept high over time. He still kept the door open to more interest rate hikes, and believed that current monetary policy is not too tight.
– We understand that recent data show resilience against economic growth and demand for labour. But if we see signs that inflation is increasing again, it may be that we have to tighten monetary policy again, said Powell.
On Thursday, the S&P 500 index fell 0.85 percent. Asian stock markets fell sharply on Thursday and continued to decline slightly on Friday. On average, the leading indices fell 0.6 per cent, according to Nordnet analyst Roger Berntsen. (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.
2023-10-20 14:37:30
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