GUIDE TO THE NORWEGIAN ST OCK MARKET www.oslobors.no www.osloaxess.no 2007 www.abmportal.no Oslo Børs ASA • P.O Box 460 Sentrum • N-0105 Oslo • Norway Visitors address: Tollbugata 2 Tel: +47 22 34 17 00 • Fax: +47 22 34 19 25 GUIDE TO THE NORWEGIAN STOCK MARKET 2007 Design: Dinamo Red. • Fo to: Getty Images og Christian Houge • T rykk: Kampen Grafisk 3 Part One About the Norwegian stock market 29 Part Two – Sector presentations Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunication Services Utilities Primary Capital Certificates 187 Part Three Index About Oslo Børs About Oslo Børs Oslo Børs was founded in 1819 and is the only regulated market place for securities trading in Norway. Oslo Børs was privatised in 2001 when Oslo Børs Holding ASA was incorporated. This company owns 100% of the share capital of Oslo Børs ASA, which in turn operates the marketplace. Oslo Børs has been a member of the NOREX stock exchange alliance since 2000, and this has helped to encourage a sizeable increase in international interest in the Norwegian securities market. The Oslo Børs marketplace offers trading in shares, primary capital certificates, warrants, bonds and other fixed-income securities, and derivatives. NOREX Alliance NOREX was established in June 1997, and is a strategic alliance between the Nordic stock exchanges. It was the first stock exchange alliance to implement a joint system for equity trading and to harmonize rules and requirements between the exchanges with respect to trading and membership. This harmonization makes the region appear as one common ­­ marketplace. The Alliance consists of the exchanges in Oslo (Norway), Stockholm (Sweden), Helsinki (Finland), Copenhagen (Denmark) and Reykjavik (Iceland), as well as the three Baltic exchanges. GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 3 The Equity Market As of 31 December 2006, the total market capitalisation of companies listed on Oslo Børs amounted to NOK 1,916 billion (EURO 232 billion/USD 306 billion). At the end of 2006 a total of 229 companies were listed, with Energy as the largest sector both in terms of number of companies and market capitalisation. Market capitalisation and number of companies by GICS sector (31 December 2006) NOK/EURO 8,238 NOK/USD 6,255 Sektor NOK EURO USD % Number of companies 10 Energy 1 022,6 124,1 163,5 53,4 64 15 Materials 73,7 8,9 11,8 3,8 9 20 Industrials 177,6 21,6 28,4 9,3 40 25 Consumer Discretionary 48,7 5,9 7,8 2,5 14 30 Consumer Staples 48,0 5,8 7,7 2,5 10 35 Health Care 6,4 0,8 1,0 0,3 13 40 Financials 187,3 22,7 29,9 9,8 16 45 Information Technology 110,2 13,4 17,6 5,8 39 50 Telecom Services 197,4 24,0 31,6 10,3 2 55 Utilities 26,6 3,2 4,2 1,4 2 PCC 17,4 2,1 2,8 0,9 20 TOTAL 1 915,8 232,6 306,3 100,0 229 Top 15 companies ranked by market capitalisation: (All figures from year-end 2006, in billion) Company Sector NOK EURO USD % Statoil Energy 358,0 43,5 57,2 17,9 Norsk Hydro Energy 248,9 30,2 39,8 12,5 Telenor Telecom Services 197,0 23,9 31,5 9,9 DnB NOR Financials 118,3 14,4 18,9 5,9 Orkla Industrials 73,5 8,9 11,8 3,7 Renewable Energy Corporation Information Technology 56,3 6,8 9,0 2,8 Royal Caribbean Cruises Consumer Discretionary 50,2 6,1 8,0 2,5 Yara International Materials 2,9 5,2 6,9 2,2 Aker Kværner Energy 42,8 5,2 6,8 2,1 SeaDrill Energy 40,3 4,9 6,4 2,0 Aker Energy 29,0 3,5 4,6 1,5 Petroleum Geo-Services Energy 26,4 3,2 4,2 1,3 Hafslund Utilities 23,5 2,9 3,8 1,2 Acergy Energy 23,4 2,8 3,7 1,2 Norske Skogindustrier Materials 20,4 2,5 3,3 1,0 GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 4 Trading Activity Trading activity has increased year by year. Average daily turnover in 2006 reached NOK 10.3 billion (EURO 1.25 billion/ USD 1.66 billion) per day, up 72% from 2005 and 187% from 2004. Total number of transactions also ended on a high with a daily average of 35,200 trades, up from 21,700 in 2005 and 13,500 in 2004. Energy is also the dominant sector in terms of trading volumes, with a market share of 65% for 2006 in total. Even though the Norwegian State controls 32% of the total Oslo market, the liquidity of shares listed on Oslo Børs compares very favourably with other stock markets. Turnover velocity (%) Nordic exchanges 2005 2006 Oslo Børs 127.52 155.39 OMX Stockholm Stock Exchange 124.14 146.85 OMX Helsinki Stock Exchange 123.75 132.17 OMX Copenhagen Stock Exchange 91.25 92.35 Iceland Stock Exchange 77.23 77.82 GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 5 GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 6 New Listings With 22, 46 and 32 new listings during 2004, 2005 and 2006 respectively, Oslo Børs has been one of the most dynamic marketplaces internationally in recent years. In Europe, only London had more IPOs in real numbers in 2005, and in relative terms Oslo has done remar- kably well during this period. In 2006, 12 of the new companies were energy companies, while the remaining 20 new companies represented 8 of the other 9 industry sectors. Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials IT Telecom Utilities OSLO BØRS and OSLO AXESS Oslo Børs is implementing changes in its listing structure as from May 2007 when Oslo Axess, a new regulated market, is being introduced. The two markets will live side by side with Oslo Børs as the fully regulated stock exchange market and Oslo Axess as the equally regulated authorised market. Simultaneously, the distinction between the Main List and the SMB List in the stock exchange market will disappear. Less stringent listing requirements will be the most dominant difference between the two markets, in particular related to length of history of the company and its operations, market capitalisation and number of shareholders. Oslo Axess will also welcome pre- commercial companies for listing. All companies listed under the Oslo Børs umbrella, being it in the Oslo Børs market or in the Oslo Axess market, are subject to the same continuing obligations towards the market. Accordingly, all companies are subject to the same control mechanisms and market sur- veillance efforts imposed by the Exchange. Proper investor protection is imperative and is hence equally ensured for both markets. GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 7 Investors Investors Investor access to the Oslo market is provided by the brokerage firms and investment banks that are members of Oslo Børs. By year-end 2006, there were 52 such members, of which 28 were international remote members. See page 26 for a complete list of all members. Non-Norwegian investors were involved in about 70% of all trading activity by volume at Oslo Børs in 2006. This market share has steadily increased from about 60% over the last few years. Approximately the same market share applies for subscription to new issues in the Norwegian market – international investors pick up a large proportion of the shares issued. The majority of this investment comes from institutional investors in the US and UK as well as from other European countries. The Norwegian retail market is very active in relation to the number of investors. Trading over the internet, including DMA (Direct Market Access), is very popular with Norwegian investors, and accounts for a high proportion of trading by international comparison (about 40% of all transactions). Norway also has a large group of wealthy and active individuals investing their own capital. Clusters Competence and unique clusters Norwegian banks and investment firms have in-depth knowledge of the Oslo market and in particular the typically strong Norwegian sectors such as oil & gas, offshore oil ser- vice, shipping, fisheries & fish farming and IT. Nearly all the local members of Oslo Børs produce extensive research on these sectors and the individual stocks involved. They also offer corporate advice and M&A services at a very high level. This is supported by the specialist sector expertise that characterises the lending activities of local banks, as well as the knowledge and expertise represented by consultants and independent advisors, legal and accounting firms and the Norwegian regulatory authori- ties. All this stems from world-class companies operating and competing both locally and internationally. Norwegian technology and entrepreneurship has always been at the fore- front of these strong sectors, and this has led to unique clusters of businesses that are rarely seen elsewhere. GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 8 GUIDE TO THE NORWEGIAN STOCK MARKET | PAGE 9 Main features of the norwegian market Listing structure and classification of companies All listed shares are categorised in terms of both how they are presented by Oslo Børs (a listing hierarchy) and by industry classification. Liquidity categories Listed shares are allocated to categories based on their liquidity, with a separate category for primary capital certificates (PCCs). Allocation is based on historic share liquidity for the previous 6 months. Shares in each category are listed alphabetically. Categories are rebalanced every six months, in June and December respectively, following the cycle of the tradable OBX index.