Oslo shares end flat; Norwegian Air Shuttle, Norske Skog surge UPDATE

Oslo shares end flat; Norwegian Air Shuttle, Norske Skog surge UPDATE

	Published : Wed, 24 Oct 2007 16:53 By : Agencies Print this Story

(Updates with full report)

OSLO (Thomson Financial) - Oslo share prices closed flat, despite Norwegian Air Shuttle taking off on strong results and Norske Skog adding hefty gains on sector consolidation rumours, but with wider market sentiment weakened by a lower US market.

A late surge in oil prices on US inventories news came too late to lift the market out of its torpor, dealers said.

The OSEBX Benchmark index closed flat at 496.9 points and the OSEAX All Share index slipped 0.1 pct to 574.3 points.

Total turnover amounted to 13.88 bln nkr.

Norwegian equity prices earlier moved up, nurtured by local stock-specific news and positive European markets which toasted some good corporate earnings results.

But those gains were later neutralised by weaker US markets and an oil price which marked time until the late afternoon release of American inventories data.

'The oil market corrected a bit from all-time highs and was being cautious waiting for the statistics for direction,' said a Norwegian oil trader.

When those numbers were unveiled they showed heavier drawdowns on crude supplies, but the news came too late to buoy the Oslo bourse.

Traders, however, said the data could provide a fillip for the next day's session.

'These numbers are very bullish... crude is going up like a rocket,' said a trader.

On the local news front, there was cheer from some good results as well as merger speculation.

Norwegian budget airline Norwegian Air Shuttle ASA surged ahead, outperforming the market and putting on 12.8 pct to 159 nkr, after it reported more than a doubling of its third-quarter pretax profits and gave a bullish outlook.

The airline said it benefitted from surging demand and an increasing number of routes. Looking ahead, the airline said it remains confident in its prospects.

Norske Skog added 10.1 pct to 52.40 nkr, on new rumours about further consolidation in the paper making sector and the possibility of the Norwegian firm finding itself a merger partner, dealers said.

Elsewhere, industry figures showed the average selling price of timber rising the equivalent of 8 pct in the third quarter on same period last year.

On the flip side of the gains was heavyweight oil producer StatoilHydro which struggled with a sluggish oil price, falling 1.29 pct to 175.50 nkr.

Oil services companies lost ground. Subsea7 was down 1.9 pct to 145.25 nkr and Seadrill was flat at 128.25 nkr.

Dealers said there are concerns Subsea7 might struggle to achieve further margin growth in a tighter overall market.

SEB Enskilda said it believes that future growth prospects are limited, especially with the firm's management having already indicated that activity levels are expected to be flat in 2008 compared to 2007.

Fred Olsen Production shed 11.35 pct to 20.30 nkr on third-quarter results hurt by increased operating expenses due to repair and maintenance extraordinary items.

Seismic oil explorers fared only a little better than their production counterparts. Despite bullish news Petroleum Geo Services reversed gains to close down 2.9 pct to 158.50 nkr.

Earlier the stock was comfortably up, rising 2.5 pct and leading a rising overall opening market on third-quarter profits ahead of expectations, and a forecast that continued prices rises will make 2008 an even stronger year than 2007.

Shipping group Frontline lost 1.1 pct to 226.50 nkr.

Analysts are growing concerned about weakening overall rates for tankers, and the limited options open to Frontline to improve its performance.

Even Aker Kvaerner closed down 1.4 pct to 178.50 nkr - despite announcing a 65 mln usd deal to supply subsea power cables and control umbilicals to Petrobras Americas' Cascade and Chinook fields in the Gulf of Mexico.

Insurance group Storebrand ended down 1.2 pct to 81.80 nkr ahead of an extraordinary general meeting, which started just before market close, to vote on the proposed acquisition of Swedish pension group SPP.

Storebrand insiders said they were quietly confident that investors would back the deal, which they say will provide strong impetus for future earnings growth.

There was doubt at some point the SPP purchase would be approved but major shareholders, including Kaupthing Bank, earlier in the week announced they would support the deal.

patrick.mcloughlin@thomson.com

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