Shipping and Offshore Shares Follow Oil Price Down

After experiencing one of the best months ever in October, maritime shares on the Nowegian share market saw fortunes reversed in November, losing almost half the gains from the previous month. The Shipping Index fell by as much as 13.8 percent in November, and the All Share Index dropped 5.1 percent.

Oslo did not benefit from the higher prices seen on most of the world's stock exchanges in November. This performance against the trend reflected the drop in the price of oil. Little hope of new production cuts emerged from the OPEC meeting at the end of the month and this severely hurt the oil service sector in Oslo making Offshore the weakest industry last month.

The market value of offshore shares on the Main List dropped by as much as NOK 9.2 billion (26.7 percent) in November. Fear of reduced activity in the oil industry pushed down the value of shares of household names such as Det Sondenfjeldske, Transocean Offshore, TGS Nopec and Petroleum Geo-Services, whose share values fell between 28 and 36 percent. Northern Offshore share value more than halved during the month.

Among shipping shares the share value of Western Bulk Shipping dropped 37.5 percent and that of Jinhui Shipping and Transportation by 30 percent. The best performing shipping shares, Swan Reefer, jumped 71.4 percent in November. During the month, Ugland International Holdings emerged as a major shareholder. Cruise operator Royal Caribbean Cruises rose 11.4 percent over the month and Team Shipping increased its value by 12.5 percent. Trading activity in shipping and offshore shares on the Main List rose by more than five percent from November 1997 as measured in the number of transactions. However, the fall in share prices this year led to a drop in the value of turnover from NOK 5.1 billion in November 1997 to NOK 4.3 billion last month.