This year, the shares on the Oslo Stock Exchange have averaged more than 20 percent, and very many ordinary people have spent 2021 debuting on the stock exchange with great success.
Can it continue? This is the question no one can answer, but at the beginning of a new year, there are three things worth following.
1) Strong price increase
Globally, inflation is higher than we have seen for many years. In the United States, annual inflation rose to 6.8 percent in November – the highest in 40 years. Here at home, high electricity prices contributed to an inflation rate of 5.1 per cent in November.
This situation will probably lead to higher interest rates, which in turn may affect growth in the world economy.
– UNCERTAIN: It is currently uncertain how unusually high inflation and rising interest rates will affect the markets in 2022 Photo: Mark Lennihan
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But the situation also provides opportunities, says investment economist Mads Johannesen in Nordnet.
– The positive thing about increased inflation and interest rates is that the Oslo Stock Exchange is full of companies within the commodities and financial industry that profit from these factors. In this sense, it looks good for the Oslo Stock Exchange into 2022.
Nordea’s Chief Investment Officer, Robert Næss, is also not particularly concerned about raw material shortages and price pressure. So far, this has only led to increased demand, which in turn contributes to better earnings in companies that can charge better.
– Actually, it is difficult to know what drives earnings in this climate, and we will therefore follow the earnings development of the companies closely. Right now, it looks good with commodity prices, shipping rates, oil prices and gas prices at high levels. This is again due to the fact that activity globally is high, but this may change when stimuli cease and interest rates rise.
2) “Cool” companies more risky
– On the other hand, if you own many start-up tech and renewable companies, this can be a very bad year, Mads Johannesen points out.
He is referring to the many new companies that are primarily attractive because many believe they will make money later in the year. With rising interest rates, it takes longer for these companies to be profitable.
– There are many shares that are nicely priced, and then I see no reason to buy those that are more expensive and can be more expensive, adds Robert Næss.
– When we can also expect more inflation, it will in practice mean that a large proportion of companies will see growth in earnings, and then you do not need the expensive “growth shares”.
Figures from Aksje Norge show that the vast majority of private investors spend their money on the main list on the Oslo Stock Exchange. At the same time, the proportion who also spend money on the more risky and “cool” growth companies on Euronext Growth increased significantly in 2021.
– How worried should we be that more and more Norwegians choose to invest in the new growth shares listed on Euronext Growth?
– For many small savers, investing in companies listed on Euronext Growth is a great opportunity to get into new companies early, much earlier than what would have been possible if they had to wait for an ordinary listing on the Oslo Stock Exchange. However, it is important to say that these are companies that are in a growth phase where the risk is great. By that is meant that the probability is also high that the growth will take longer, cost more or not occur, says general manager Kristin Skaug in Aksje Norge.
– Source: Action Norway
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3) The pandemic and the crisis measures
– I do not think the pandemic will be so important. Even though we are in a pandemic, most people manage to get the jobs done in a good way while shopping for goods as before. When the authorities also stimulate the economy through low interest rates and direct support, it becomes a good climate for the companies, says investment director Robert Næss in Nordea.
– The risk is rather there when the pandemic is definitely awake and the stimuli cease.
Mads Johannesen is also not worried about the pandemic. Rather, he points to a type of risk that is always present, but which is often impossible to predict:
– The absolute biggest threat for 2022 is the one we unfortunately do not know. What does the most damage to the stock market is what no one had imagined beforehand, a typical case may be the coronavirus. It is these exogenous events that I am most nervous about – the known unknown, says Mads Johannesen.
Finally, Kristin Skaug has a simple tip when reading expert tips now at the turn of the year.
– Shareholders and share managers are always positive. Macro people are by definition negative. The section of the advice from these two groups is probably somewhat closer to reality.
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