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SHARES

Muted start to year on Stockholm market

The new year got off to a disappointing start on the Stockholm share market, with concerns about US growth making investors cautious.

Published: 3 January 2008 18:36 CET

The Stockholm stock exchange continued its downward trend on Thursday. At close, the OMXS index was down 0.8 percent to 343.0. Activity levels were low due to many traders and investors taking extended Christmas breaks. Turnover on Thursday stood at 18.9 billion kronor.

Clothing giant H&M was a big loser on Thursday, falling 3.0 percent to 77 kronor. H&M’s competitor Kappahl fell 6.4 percent to 77 kronor. There was also bad news from clothing retailers elsewhere in Europe, with Britain’s Next warning that it was ‘extremely cautious’ about prospects for 2008.

Other heavyweight shares to fall in Stockholm on Thursday were Volvo, down 1.4 percent to 104 kronor, and Sandvik, down 1.7 percent to 104.25 kronor.

Tobacco company Swedish Match bucked the trend, rising 2 percent to 154 kronor. Engineering company SKF was up 0.7 percent to 108.25 kronor, and bank SEB was up 0.9 percent to 165.50.

NORWEGIAN

Norwegian shares plummet by more than half on dilution fears

Shares in Norwegian Air Shuttle plummeted 63 percent when the Oslo Stock Exchange opened on Tuesday, as investors reacted to plans announced last week to convert a massive 44.5bn kroner ($4.3bn) of debt into new shares.

Published: 14 April 2020 13:15 CEST
Norwegian shares plummet by more than half on dilution fears
Is the sun finally about to set on Norwegian? Photo: David Charles Peacock
The fall was so sharp that the exchange was forced to place the shares under “special observation”, a measure taken only when valuations are extremely uncertain. The shares then rebounded and by Tuesday afternoon were trading at about a 30 percent down on where they ended the week last Thursday. 
 
Mads Johannesen, investment economy at the online share trading company Nordnet, said that the company's rescue plan threatened to severely dilute existing shareholders.  
 
“Existing stockholders today wouldn't be left with much if they decide to fully dilute the bonds and convert them into equity, so it doesn't look promising,” he told The Local. “I guess they're going to survive in some form, but how they're going to look coming out the other side depends on the negotiations.” 
 
 
The international brokerage Sanford C. Bernstein on Tuesday cut its target price for the company's shares to zero. 
 
“Norwegian is at the end of the line,” the brokerage's analyst Daniel Roeska wrote in a note to clients announcing the decision. “Rounded to the nearest Krone, existing shares are all but worthless.”
 
The Norwegian government last month made the overwhelming majority of the 3bn kroner in loan guarantees it offered the airline conditional it successfully swapping some of its near 80bn kroner debt pile for equity. 
 
Norwegian is now negotiating with banks and bondholders to convert more than half of its debt into shares, before putting the plan to existing shareholders at a meeting on May 4.
 
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