Volatility in Oslo

Before we begin to analyze what has happened to the shipping stocks around the world over the last six weeks, we would like to shed some light on an often forgotten fact about the Oslo stock exchange. Norwegian investors claim that the market is run by a few insiders, and their foreign counterparts sigh over the lack of liquidity. This may all be true, but to say that there is no money to be made would simply be a lie. Marine Money has taken a look at the 17 companies that are included in the Shipping Equity Index, trading in Oslo. We analyzed the companies’ six-week highs and lows (11/25/98-1/12/99), and ranked them according to percentage change. As can be seen in the graph below, the volume might be missing but the prices are moving like yo-yos.

Of course, one must be a master of timing if one is to capitalize on the full spread of the high/low, not to mention one must know which stock to short and which to long. In the light of last year’s market performance, we would think that Oslo-based investors would be familiar with shorting stocks by now. However, due to the low volume and volatility at the stock exchange, one must realize that even if an investor has a sense that a stock will be falling in the near future, he cannot be certain that he will be able to borrow against the stock.

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