Stock Market Update: Red Start to Second Trading Day of the Week as Oil Prices Weaken, Norwegian Reports Strong Passenger Numbers, and KOA Prepares for General Meeting

The second trading day of the week is red out of the starting blocks.

The main index ended up slightly by 0.08 per cent on Monday, after having been steadily slightly higher throughout most of the trading day.

The main index is down 0.97 per cent at 10.15am.

These are the most traded shares:

• Equinor is down 1.56 percent
• Storebrand falls 1.80 percent
• Frontline falls 3.42 percent
• Norwegian rises 0.44 percent
• Nordic Semiconductor falls 0.83 percent

Oil prices continued to strengthen on Monday, following the meeting of the oil grouping Opec at the weekend. But here, too, things turn around on Tuesday.

During the meeting in Vienna, it became clear, among other things, that Opec is extending the downscaling in oil production until the end of 2024, rather than the end of 2023.

At 10.15 a barrel of North Sea oil (Brent spot) is traded for USD 75.56 a barrel. That’s a decrease of 1.33 percent since midnight.

Fresh Norwegian tall

Norwegian came out with its passenger figures for May in the morning hours. There they were able to say that they flew 1.9 million passengers in the last spring month of the year. The company has previously gone on the offensive and announced that they are expecting one of their busiest summer seasons ever.

The NAS share has been flying on the Oslo Stock Exchange this year and is up 69.9 per cent since 1 January.

After the opening of trading, a Norwegian share goes for NOK 12.54.

Believes cuts affect tank shares

While the oil stocks pulled Børsen up on Monday, the tank stocks pulled down. John Fredriksen-owned Frontline fell a whopping 6.4 percent on Monday. The decline continues today. Just after 09.40, the shipping company is down 3.07 per cent.

Hafnia also continued Monday’s fall, which ended with a decrease of 4.8 percent. The company fell a further 3.49 per cent this morning.

Okeanis Eco Tankers fell 4.32 percent on Monday. On Tuesday, the company is down another 2.71 percent.

Brokerage Fearnley Securities writes on Monday that the decision of Saudi Arabia is obviously negative for the tankers, according to Infront TDN Direkt.

“Should Opec+ live up to the agreed production levels and lower levels in 2024, there could be lean months ahead. The cut in July should mean pressure on rates next month and the outcome of the Opec+ meeting is probably the last nail in the coffin for a summer market that suggests weaker earnings in the third quarter,” the brokerage house writes.

Nevertheless, Fearnley Securities believes that oil demand in the second half of the year will force Opec+ to reconsider both these and previous cuts, and expects a rate rise in the fourth quarter.

General assembly in KOA

There has been great uproar leading up to the general meeting in Kongsberg Automotive (KOA). The board takes aim at shareholder Arild Christoffersen in a shareholder letter sent out on Monday morning. The letter states that Christoffersen’s statements “have no basis in reality”.

The background is an open shareholder letter from Christoffersen, in which he urges other shareholders to oust chairman Firas Abi-Nassif.

Christoffersen confirms to E24 before the general meeting that he has proposed himself as a board member. He believes that what appears about him in the shareholders’ letter is “as twisted as it can get”.

– I want to throw out the current board. It is because I believe that the board does not work very well in terms of results, says Christoffersen to E24.

Before Tuesday’s general meeting, Christoffersen has secured powers that give control of over 20 percent of the votes. He points out that the company’s stock market value has been halved during the period Abi-Nassif has been chairman of the board.

According to Christoffersen, it seems “as if the board and management have deliberately worked to keep the share price low over a longer period, and thus the company becomes attractive for acquisitions”.

Strong accusations

In Monday’s shareholder letter, KOA wrote that Christoffersen claims that the board “actively manipulates the accounting figures to achieve a low share price” and denies that this is the case.

The company points out that, in line with the recommendations from the Norwegian Board of Corporate Governance (NUES), they have an election committee “which is the right body to address possible board changes to”.

The board also writes that in recent years it has worked closely with management to ensure the company’s operations and develop a strategy to increase the value of the company. “The board understands the shareholders’ frustration with the development in the share price,” the letter states.

Just after opening on Tuesday, the KOA share fell 0.23 per cent. It is now traded for NOK 2.57.