Marine Harvest ASA climbed in Oslo as investors renewed their focus on the improving outlook for fish prices after the world’s largest salmon farmer failed to take control of Cermaq ASA, the biggest maker of fish feed.
The Oslo-based company advanced as much as 2.4 percent and traded 2 percent higher at 6.285 kroner as of 1:10 p.m. in the Norwegian capital. That makes Marine Harvest the biggest gainer on the Oslo stock exchange’s OBX index of 25 most-traded stocks.
“We upgrade our salmon price assumptions again” and now expect a price per kilogram (2.2 pounds) of about 36.5 kroner in 2013, up from a previous estimate of about 34.5 kroner, Pareto Securities AS analyst Henning Lund said in a report dated June 27. “Even more important is that the longer term market outlook continues to look good,” the analyst wrote.
Shares in salmon producers tumbled in 2011 as prices slumped 60 percent to 18 kroner a kilogram from April to October amid rising production from Norway and Chile, the world’s two largest fish farmers. Output from Chile increased as farmers resumed supplies after the anemia virus infected fish and ravaged its farms.
Selling prices have since recovered to more than 40 kroner, according to the Nasdaq Salmon Index, a weighted average of prices reported to NOS Clearing ASA, a clearing house for financial contracts on the fish.
“Norway, producing 60 percent of global volumes, is close to its full utilization and further growth is dependent on politicians, who we assume will grant 5 percent annual growth,” Pareto’s Lund said. “Chile, producing 20 percent of global supply, have biological issues which we believe will result in moderate growth in the coming years.”
Shares in Marine Harvest have gained more than 50 percent during the last 12 months, giving the company a market value of 23.6 billion kroner ($3.9 billion).
Marine Harvest, in which Norwegian billionaire John Fredriksen owns a 26.4 percent stake, is likely to bring back quarterly dividends, starting in the second quarter, after ending its bid to buy Cermaq, it said on June 26.
Marine Harvest ended its approach for Cermaq on June 21 after failing to get the 33.4 percent stake it was seeking. The Norwegian government, which already owned 43.5 percent of the feedmaker, has since increased its shareholding to 59.2 percent.