Safest Sovereign Credit: Norway

[click to enlarge]

This is probably not shocking if you've been reading this site for a while. The big picture view is that Norway is a surplus country that produces something that the world must have.

Norway is not riskless however due to future production estimates.

Comments

[nobby73:]

Thanks for pointing this out. I have a large proportion of my assets in Norway, which I moved into at the start of the year. The more you drill into the data, the more there is to like: large natural resources of oil and also gas, high levels of reserves of foreign currency and gold, enormous state pension fund approx same size as Calpers, low unemployment (2.7%), good selection of businesses linked to oil and gas, stable banking sector.

I don't understand how the markets view the currency though, it trades like an emerging market currency.

Take today for example, announced June unemployment, up 0.1% to 2.7%!, strong PMI number and yet, when the US employment data came out, Krone fell by 1%.

It seems to me one of the most stable currencies in the world and yet it's 25% down on the USD vs one year ago.

Jul 02 01:33 PM

[Roger Nusbaum:]

well it is a commodity based currency and although generally healthier than AUD the both seem to get hit when risk aversion pops up.


On Jul 02 01:33 PM nobby73 wrote:

> Thanks for pointing this out. I have a large proportion of my assets
> in Norway, which I moved into at the start of the year. The more
> you drill into the data, the more there is to like: large natural
> resources of oil and also gas, high levels of reserves of foreign
> currency and gold, enormous state pension fund approx same size
> as Calpers, low unemployment (2.7%), good selection of businesses
> linked to oil and gas, stable banking sector.
>
> I don't understand how the markets view the currency though, it trades
> like an emerging market currency.
>
> Take today for example, announced June unemployment, up 0.1% to 2.7%!,
> strong PMI number and yet, when the US employment data came out,
> Krone fell by 1%.
>
> It seems to me one of the most stable currencies in the world and
> yet it's 25% down on the USD vs one year ago.

Jul 02 01:37 PM

[nobby73:]

Thanks, but this is my point, given the large quantity of non-resources reserves (it's a net foreign creditor nation), if you see US unemployment go to 9.5% vs 2.7% in Norway, buying US Dollars seems illogical.

Going from Krone to Dollar because bad US data causes oil to fall and risk aversion to increase is like climbing out of the life boat and back onto the Titanic because it's a bigger boat.

On Jul 02 01:37 PM Roger Nusbaum wrote:

> well it is a commodity based currency and although generally healthier
> than AUD the both seem to get hit when risk aversion pops up.

Jul 02 01:57 PM

[Trader Maher:]

nobby73, are you a Norwegian citizen? If not how did you open a bank or brokerage account in Norway? I tried to , but they require a Norwegian SSN, although I lived in Oslo for a short wile years ago, i do not have one. I moved some assets to Canada, deposits in Canadian $ in a canadian bank, and to Israel, if you can please explain how to open a bank and brokerage account in Norway.


On Jul 02 01:33 PM nobby73 wrote:

> Thanks for pointing this out. I have a large proportion of my assets
> in Norway, which I moved into at the start of the year. The more
> you drill into the data, the more there is to like: large natural
> resources of oil and also gas, high levels of reserves of foreign
> currency and gold, enormous state pension fund approx same size as
> Calpers, low unemployment (2.7%), good selection of businesses linked
> to oil and gas, stable banking sector.
>
> I don't understand how the markets view the currency though, it trades
> like an emerging market currency.
>
> Take today for example, announced June unemployment, up 0.1% to 2.7%!,
> strong PMI number and yet, when the US employment data came out,
> Krone fell by 1%.
>
> It seems to me one of the most stable currencies in the world and
> yet it's 25% down on the USD vs one year ago.

Jul 03 11:25 AM

[HerrHansa:]

I also have several Norwegian investments, but through ADRs and sideways plays of companies based in Norway. None of these are simple to research, and they are energy industry based, so they fluctuate a little with the price of oil. I wish there were a few more ADRs, since there are some companies on OBX that are fairly solid.

Jul 03 03:18 PM

[nobby73:]

No, not Norwegian. I have banking facilities that enable me to have foreign currency accounts, and there is are various Norwegian ETFs, DnB has one on the OBX and there are several on bonds as well as some funds. It's worth doing a bit of research, as there are various "Nordic" funds that have Swedish risk in them and I am less bullish on Sweden owing to the banking exposures to the Baltic states. As far as I am aware, there are no restrictions on foreign ownership of Norwegian assets. Yes, there is a heavy weighting on oil and gas, but I look at Norwegian risk as being very secure on the downside, owing to excellent financial management history and large foreign currency reserves, with upside linked to oil and gas.


On Jul 03 11:25 AM Trader Maher wrote:

> nobby73, are you a Norwegian citizen? If not how did you open a bank
> or brokerage account in Norway? I tried to , but they require a Norwegian
> SSN, although I lived in Oslo for a short wile years ago, i do not
> have one. I moved some assets to Canada, deposits in Canadian $ in
> a canadian bank, and to Israel, if you can please explain how to
> open a bank and brokerage account in Norway.

Jul 03 06:17 PM