In 2017, bonds with a value of more than NOK 500 billion were issued through the VPS infrastructure, so that by the end of 2017, the total value of bonds registered with VPS was NOK 2,100 billion. This much new capital has never before been issued on Oslo Børs as in 2017. 21 new limited companies and savings banks were listed on Oslo Børs marketplaces and we experienced peak dividend payments. The growth continues during the first two months of the year, both with respect to equities and bonds and 2018 may become another year for records.
We observe that the Norwegian market is attracting an increasing international interest, mainly driven by the strong Norwegian sectors in energy, shipping and seafood. In February, the Chilean salmon company Salmones Camenchaca was, among other companies, listed on Oslo Børs. We are also experiencing increasing international interest in the Norwegian bond market. International companies issue loans in foreign currency, partly aimed at international investors. International investors have for some time dominated the Norwegian share market with a 38% ownership rate by the end of 2017. International investors also increase their ownership of bonds and now hold approximately 25% of the issued volume of bonds registered with VPS.
This development is driven by a competitive Norwegian capital market, where there is a close cooperation between increasingly internationally oriented financial groups and investment banks, a competitive infrastructure at Oslo Børs and VPS, and a good trustee function at Nordic Trustee. Additionally, there are competent consultants’ communities in Norway within legal and corporate finance etc. We have together created a market with high expertise in all segments, efficient solutions with low transaction costs and opportunities for rapid implementation. This is attractive and attracts capital/investors.
Of course, it is important to further develop all the joints of this chain so that we also will be competitive in future. With the introduction of more international regulations, the markets will become harmonised and international competition will increase. New regulation, like MiFID II, is expected to result in less research coverage for smaller companies. That is, the issuers themselves are likely to increase their efforts to keep Norwegian and international investors informed about developments of the company. The Shareholder Rights Directive II (SRD II), which will come into force in June 2019, will also increase the requirements for facilitating shareholder information, including underlying owners on omnibus accounts. In Our February customer survey revealed that only 15% of issuers know the consequences of SRD II in relation to their IR duties.
VPS offers secure, efficient and reliable processes to protect the issuers’ and the investors’ interests, i.a. through flexible solutions for issues, standardised payment solutions with settlement in central bank money, registration of rights in the securities register and tax reporting. Together with DNB and Nordea, we are now launching a new and user-friendly issuer portal with more information and with access to more data. The solution will also include information that twill enable limited liability companies to fulfill their duties in connection with SRD II. We will continue developing our services contributing to a competitive Norwegian capital market also for the years to come.
Yours sincerely,
Audun Bø
CEO