How To Make Money From The Stock Market In Nok

Transcription

1 SKAGEN Vekst Status as of

2 Why SKAGEN Vekst? Balanced portfolio adapted to Norwegian investors Better geographic spread than pure Norwegian fund Better industry balance than a Norwegian fund = =) lower risk than Oslo Stock Exchange Companies which are undervalued compared to values and earnings with good revaluation potential Never either Norway or abroad, always both thank you very much Foreign part of fund complements Norwegian companies: Type of companies not found on Oslo Stock Exchange Lower valued companies with higher quality than found on Oslo Stock Exchange ==) High risk adjusted return

3 Markets YTD 2005 in NOK Russia + 77 % Brazil + 55 % Hungary + 47 % Estonia + 47 % South-Korea + 46 % Turkey + 44 % SKAGEN Vekst + 40 % Norway (OSEBX) + 39 % Mexico + 39 % India + 39 % Emerging markets index + 35 % Austria + 36 % Canada + 33 % South-Africa + 28 % Poland + 28 % Denmark + 23 % China (Hong Kong) + 20 % Finland + 18 % Hong Kong + 17 % Singapore + 16 % Switzerland + 15 % France + 15 % World Index + 15 % Japan + 15 % Spain + 14 % Germany + 13 % England + 13 % Sweden + 12 % Netherlands + 11 % Thailand + 11 % USA (SP500) + 9 % Belgium + 9 % Italy + 8% USA (Nasdaq) + 7 % Indonesia + 5 % Taiwan + 3 % China (local) + 1/-2%

4 Market development to date 3rd Quarter in NOK Russia + 43 % Brazil + 34 % Poland + 26 % South-Africa + 25 % Turkey + 22 % Hugary + 29 % South-Korea + 20 % Mexico + 20 % India + 19 % SKAGEN Vekst + 18 % Emerging markets index + 18% Canada + 17 % Norway (OSEBX) + 16 % Japan + 15 % Estonia + 13 % Austria + 13 % China (local) + 11/+9 % Sweden + 10 % Spain + 10 % Finland + 10 % Switzerland + 9 % Germany + 9 % Hong Kong + 9 % France + 8 % Thailand + 8 % China (Hong Kong) + 8 % Denmark + 7 % Italy + 7 % World Index + 7 % Belgium + 6 % England + 6 % USA (Nasdaq) + 5 % USA (SP500) + 4 % Netherlands + 4 % Singapore + 4 % Taiwan - 6 % Indonesia - 9 %

5 Results as of 30/ YTD 2005: SKAGEN Vekst + 39,6% Oslo Stock Exchange Benchmark Index + 38,6% World Index (NOK) + 14,6% 3rd Quarter 2005 to date: SKAGEN Vekst + 18,2% Oslo Stock Exchange Benchmark Index + 15,8% World Index (NOK) + 7,1%

6 Results sub-portfolios as of 30/ in NOK YTD 2005: Norwegian part of SKAGEN Vekst + 50,2% Global part of SKAGEN Vekst + 40,5% Oslo Stock Exchange Benchmark Index + 38,6% World Index (NOK) + 14,6% Hittil i 3. kvartal 2005: Norwegian part of SKAGEN Vekst + 23,5% Global part of SKAGEN Vekst + 17,6% Oslo Stock Exchange Benchmark Index + 15,8% World Index (NOK) + 7,1% Gross portfolio returns (fees, currency gain/loss and net interest not included)

7 SKAGEN Vekst Relative development Norway/abroad 2005 PRESTASJONSMÅLING PROSENT Relativ Performance Norge Periode Relativ Performance Utland

8 SKAGEN Vekst Relative development Norway/abroad last 3 years PRESTASJONSMÅLING PROSENT Relativ Performance Norge Periode Relativ Performance Utland

9 Contributors YTD 2005 SKAGEN Vekst Norsk Hydro 169 m Bonheur 109 m Stolt-Nielsen 96 m Samsung Electronics 93 m Petrobras 84 m Nutreco Holding 82 m Yara 78 m Ganger Rolf 73 m Wilh. Wilhelmsen 72 m CG Geophysique 64 m Norske Skog - 39 m Sun Microsystems - 8 m Kinnevik - 8 m Alcan - 5 m Natuzzi - 4 m United Comm. - 3 m Sum value added: m m = MNOK

10 Contributors to date 3rd Quarter 2005 SKAGEN Vekst Norsk Hydro 81 m Wilh. Wilhelmsen 61 m Bonheur 54 m Samsung Electronics 54 m Petrobras 46 m Stolt Nielsen 40 m Eletrobras 39 m Tomra 37 m Global IP Sound 36 m TGS Nopec 35 m Hannover Re - 8 m Kyocera - 6 m Hanjin Shipping - 4 m Pfizer - 4 m Crew Gold - 4 m Sum value added: m m = MNOK

11 Bought Fairmount Heavy Transport Thule Drilling (new) Eidesvik Offshore Seadrill Pride Intl BP Rederi AB Transatlantic Hyundai Heavy Industries Net changes > NOK 10 mill. Changes to date 3rd Quarter 2005 SKAGEN Vekst Sold Exploration Resources (out) TGS Nopec Bjørge Gruppen (out) Norske Skog Yara Crew Gold Exmar (out) Bucher Industries Rieber & Søn (out) Aberdeen Asset Management (out) Concordia Maritime (out) Catch Communication(out) Chr. Hansen Olav Thon

12 SKAGEN Vekst Largest holdings as of 30/ Norsk Hydro 5,5% Samsung Electronics (South-Korea) 3,4% Stolt Nielsen 3,2% Wilh. Wilhelmsen 2,7% Bonheur 2,7% Norske Skog 2,5% Nutreco (Netherlands) 2,4% Yara International 2,4% Solstad Offshore 2,2% Petrobras pref. (Brazil) 2,1% Cash 2,0% SUM top 10: 29,1 percent (down from 31,1 percent as of 31/12-04)

13 SKAGEN Vekst Pricing main holdings as of 30/ Price/book P/E 05e Price target Norsk Hydro (733) 2, Samsung Electronics pref.(454 ) 1, Stolt Nielsen (261,5) 2, Wilh. Wilhelmsen (229) 2, Bonheur (574) 1, Norske Skog (96,75) 0, Nutreco (36,6) 2, Yara International (118,25) 3, Solstad Offshore (99) 1, Petrobras pref. (63,75) 2, Average top 10 1,9 12,4 > 10%

14 Compared to book equity, Oslo industrials are above the historical average 320 Oslo Industrials vs. Price/Book band Includes all shares ex finance and shipping P/B = P/B = Source: EcoWin, First Securities

15 Oil price development last 16 years D e t e r f o r s k j e l l

16 Norsk Hydro share price has increased in line with estimates. Compared to earnings the share has not become more expensive

17 Attractive direct returns on Oslo Stock Exchange especially compared to interest rate level (source:first Sec.)

18 Compared to earnings, Oslo Stock Exchange is still valued lower than European and US shares 27,5 PE 12 Month Fwd Stoxx 600 vs S&P ,5 25,0 25,0 22,5 22,5 20,0 S&P ,0 PE 17,5 17,5 15,0 12,5 Stoxx ,0 12,5 10,0 7,5 OSEBX ,0 7,5 Source: EcoWin

19 However, if history repeats itself, there should not be any large Norwegian discount? 800 EPS development, OSEBX and S&P 500 Indexed, Local Currency, S&P operating, OSEBX recurring ex shipping/finance 400 OSEBX 200 S&P Source: EcoWin, First Securities

20 European shares are priced at a low level compared to return on bonds Stoxx 600 P/E 12 month forward vs Euro bond yield Bond yield on reverse scale 25,0 22,5 Bond yield 0,030 0,035 0,040 20,0 17,5 15,0 12,5 P/E 0,045 0,050 0,055 0,060 0,065 0,070 0,075 0,080 10, ,085 Source: EcoWin

21 Is the 10-year cycle repeating itself? (Source: First Sec.) 320 OSEBX/TOTX 80s, 90s and 00s s 00s 80 90s Source: EcoWin

22 Threats Increased inflation expectations ==) higher bond interest. Raw materials and freight price increases ==) increased inflation. High capacity utilisation in China ==) increased inflation. Tightening of China s monetary policy what about the currency? Increased real interest ==) higher bond interest. Increased risk premium (is at a low level especially in emerging markets). Slow down of economic upswing due to lower consumer demand in US. Margin pressure among several companies due to rising raw material costs. Higher energy prices (subdues global growth). Worse framework conditions for Norwegian businesses after General Election? Fear of tightening of US monetary policy (too high interest rate increases). USD going down the drain? Competition-distorting

23 Opportunities Better economic development than market s relatively low expectations Asia will continue to be driving force for global growth. New investment cycle within raw materials and energy many capacity ceilings have been reached. Strong likelihood of increase in prices where equity markets valuation of companies is lowest (Asia, Europe and South America). Liquidity driven equity market (low rate of return required). Institutional owners have small units of shares. Improvement in earnings in Increased activity within acquisitions/mergers. Moderate valuation of our portfolio companies.

24 Outlook 2005 Follows pattern of the 1980s and the 1990s first three years of turbulence, then strong reaction upwards, followed by a period where confidence in the share market slowly returns Higher uncertainty regarding economic outlook but possibilities for higher growth expectations throughout the year Still stimulus from China and emerging markets possible positive stimuli from Japan and Europe Slowing growth in the US gives improved global balances Moderate valuation of shares, low perception of risk and stable interest rate level forms basis of continued upwards revaluation throughout the year Corrections in the market spring resemble the corrections last year when interest expectations changed. After the correction last year strong economic expansion continued to be the topic this year it will be the revaluation of companies. Galloping energy prices now constitute a real risk to continuing economic growth. So far increasing base rates have been compensated for by falling bond rates.