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Stockholm market falls after bad US figures

Poor US job figures contributed to making the first week of 2008 one of the Stockholm Stock Exchange's worst starts to the year for a long time.

Published: 4 January 2008 18:56 CET
Stockholm market falls after bad US figures

The OMXS index had risen in early trading, after falling for two days in a row. But the good news was short-lived. The news from the US that the number of people in work in December was up just 18,000 – worse than expected and the weakest growth since 2003 – sent the world’s stock markets tumbling.

At closing, the OMXS was down 3.2 percent to 332.1. Stock markets also fell elsewhere in Europe, with London’s FTSE 100 down 2.0 percent, the Frankfurt DAX down 1.2 percent and the Paris CAC also down 1.2 percent.

Shares worth 22.8 billion kronor ($3.6 billion) changed hands during the day. Overall, the Stockholm exchange fell 5.6 percent during the three trading days since the New Year holiday.

Among the losers in Stockholm were clothing giant Hennes & Mauritz, down, 4.4 percent to 358 kronor. H&M’s share price is down 9 percent since markets opened on Wednesday.

Telecom company Ericsson was also a loser, falling 4.3 percent to 14.18 kronor. Commercial vehicle maker Volvo was down 5.8 percent to 98 kronor, Electrolux was down 7.6 percent to 96.75 kronor, engineering company Sandvik was down 5.8 percent to 98.25 kronor, while Atlas Copco ended the day at 87.75 kronor, down 5.1 percent.

A small number of companies bucked the downward trend: oil company West Siberian Resources rose 6.1 percent to 4.88 kronor on the back of news that its oil production had increased to a new record level of 40,500 barrels a day at the end of 2007. Total annual production at the company last year was 15 million barrels, up from 10.6 million in 2007.

Other good news came from cosmetics company Oriflame, which rose 2.2 percent to 401.50 kronor, Netinsight, which rose 3 percent to 5.32 kronor.

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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