Storebrand Buys Stocks as Norway Turns Less of an Oil Market

Updated on
  • Says weaker krone positive for companies such as Telenor
  • Storebrand has no scenario with considerably higher oil price

Norway’s stock exchange becoming less oil dependent is making a buyer out of Storebrand ASA, the country’s largest listed life insurer.

“We bought a little bit of Norwegian stocks yesterday in our tactical portfolios and funds that we manage,” Olav Chen, head of global tactical asset allocation at Storebrand Asset Management, said by phone Tuesday. “We think the fall yesterday was an overshooting and that it’s oversold.”

The oil sector has lost its dominance on the Oslo exchange over the past year as energy stocks have been hammered by falling crude prices. Statoil ASA’s market capitalization has slid to 380 billion kroner ($46 billion) from 600 billion kroner at the end of the second quarter of 2014.

“The oil sector is shrinking on Oslo Boers, so it’s not that oil dependent anymore,” said Chen, who oversees about 70 billion kroner. “Now the sector makes out around one fourth of Oslo Boers. It used to be almost half.”

The Oslo benchmark index was down 0.3 percent at 10:19 a.m., after rising 2.8 percent on Tuesday.

OBX Benchmark

“Current levels should give positive returns in the longer term,” he said. “Pricing has reached levels that historically indicated buy opportunities.”

The decline in oil prices has also weakened the krone, which is positive for Norwegian stocks, according to Chen. Earnings in kroner will increase for Telenor ASA and other companies with revenue in foreign currencies, he said.

“Going forward a lot will depend on the oil price,” he said. “We have no scenario with considerably higher oil prices.”

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