Noteworthy Danish, Norwegian, and Swedish Equities
Starting in Denmark, where perhaps one of the most mentioned stocks globally at present steals the limelight; namely, Novo Nordisk, which has benefitted from a surge in popularity of weight loss drugs Wegovy and Ozempic over the last 18 months or so.
In fact, the increased interest in both of these drugs has been such that around two-thirds of Denmark’s 2022 GDP growth was attributed to the pharmaceutical sector. Demand for these two products is likely to be a significant driver of the stock’s performance over the medium-term, though with consensus expecting EPS to rise around 18% this year, a significant degree of good news may already have been discounted by financial markets.
A handful of other interesting, and newsworthy, names also spring to mind in the new Danish equity offering. AP Moller-Maersk, more commonly known simply as Maersk, is one, being the world’s largest shipping company by fleet capacity, with around a 20% global share. Ongoing, and escalating, geopolitical tensions in the Middle East have resulted in the majority of shipping traffic now avoiding the Red Sea and Suez, instead transiting from Asia to Europe via the Cape of Good Hope, a much longer route adding around a week to travel time.
Maersk noted recently that such a diversion will increase fuel bills by around 50%, though the stock itself typically tends to trade as a proxy for container freight rates, helping to explain the recent rebound from near 3-year lows.
Meanwhile, the energy sector is well-represented via firms such as Vestas and Orsted, both of whom have a significant focus on renewables, particularly wind power. Finally, the self-styled ‘probably the best beer in the world’ Carlsberg is also now available to trade, though the rangebound nature of the stock over the last three years may imply the market doesn’t have quite as much faith in that slogan as the firm’s marketing department.
Turning to Norway, where once again the energy sector is heavily-represented, though this should come as little surprise with the oil and gas industry accounting for around 20% of the country’s GDP, and government revenue.
By market-cap, state-owned Equinor represent the largest such sectoral player amid the new listings, with a focus primarily on petroleum production and exploration, as well as several pipeline operations. With this in mind, it is little surprise that the stock’s price is typically tightly correlated with crude prices, whereby the continued dour demand outlook amid ongoing global manufacturing woes looks set to continue to exert downward pressure on both over the short- and medium-term.
Other Norwegian energy names of note include Aker, an investment conglomerate with interests concentrated in the O&G sector, in addition to Norsk Hydro, one of the world’s largest aluminium producers but also the nation’s largest producer of hydroelectric power.
Crossing the border into Sweden, where the nation’s most valuable publicly traded firm stands as Investor AB, a conglomerate serving largely as the investment arm of the Wallenberg family – a prominent Swiss family who, among other firms, have a significant presence in electrical firm ABB, industrial giant Atlas Copco, telecoms company Ericsson, and aviation group SAS. All, bar ABB, are available via this new equity offering.
Elsewhere, a handful of notable names in the financial sector are also now available to trade, including both Swedbank and Handelsbanken, the former of which has been embroiled in numerous regulatory and compliance issues in the Baltic region in recent times.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.