Oslo Exchange Sees Listings Rebounding This Year as Volatility Persists

Oslo Boers VPS Holding ASA, the operator of Norway’s stock exchange, said companies are returning to its market after new listings dried up last year, even as volatility persists in the wake of Europe’s debt crisis.

The Oslo exchange has had 10 new listings this year and approved a further seven companies for admittance by the end of July, according to Chief Executive Officer Bente Landsnes. That compares with three for all of last year. In 2008, before the bankruptcy of Lehman Brothers Holdings Inc. triggered the worst financial turmoil since the Great Depression, 13 new stocks were listed in Oslo.

“Parts of the pipeline we saw before the financial crisis hit us are now coming back,” Landsnes said in an interview on June 18 at her office in Oslo. Even so, “the environment is unstable. We need a stable market to keep a stable listing market, but still it’s optimistic.”

Concern about levels of sovereign debt in Europe sent the MSCI World Index of developed-nations’ stocks down 9.9 percent last month and helped spur at least 27 companies worldwide to pull IPOs since the start of May, according to data compiled by Bloomberg. OIG Offshore Installation Group ASA, which was approved for listing by the end of next month, postponed its initial public offering on June 18, citing “volatile” markets.

Close the Door

“The market is more critical,” the CEO said. “If you have a very good company and a very good story you will probably be able to fund it. If the story is thin and the history is short, it’s probably more difficult. Very bad news can close the door for IPOs in just a week.”

Knutsen Offshore Tankers ASA, a provider of oil marine- transportation services, postponed its IPO in Oslo earlier this month, while China Fishery Group Ltd., a Hong Kong-based coastal and deep sea fishing company, delayed a proposed secondary listing of its shares in Oslo in June.

North Energy ASA, the Norwegian exploration company that holds ownership in 13 licenses from the Barents Sea to the North Sea, raised 350 million kroner ($55 million) in an initial public offering in February, Norway’s largest so far this year. The stock has since slipped 28 percent.

Nasdaq OMX Nordic, the operator of seven stock exchanges including those in Finland, Denmark and Sweden, said earlier this month initial public offerings in the Nordic region should increase during the next two years.

Market Share

Landsnes said she’s “confident” the exchange will remain independent and fend off rivals. The value of stock traded on Nasdaq OMX Nordic was 59.9 billion euros ($73.8 billion) in May, compared with 18.8 billion euros in Oslo, giving the Norwegian exchange a 24 percent share of volume traded on Nordic bourses, according to the European Federation of Exchanges.

“We are fighting the competition and so far we have done the necessary things to make sure that for broker houses and investors it’s efficient and high quality, with liquid equities and a number of listings which will create new interest for this market,” the CEO said.

The exchange introduced a central counterparty, or CCP, for clearing trades earlier this month, reduced trading fees and cut staff by 23 percent over the past year. The changes make trading in Oslo “a lot more efficient than it was before,” she said.

In addition, the bourse entered into a strategic partnership agreement with London Stock Exchange Group Plc and signed a memorandum of understanding with Singapore Exchange Ltd. to allow secondary listings of companies on each other’s exchanges last year.

“We will continue to work with the LSE on technology, products and other things,” the CEO said. “We are constantly looking to see if there are interesting partnerships that can be beneficial to both parties on product development or agreements similar to what we have with Singapore.”

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net.

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