Norway: An Attractive Investment Destination

Among the Nordic countries, Norway's economy is strong and is well positioned for an economic recovery. In fact, Norway is one of the favorite investment destinations among European countries.

The Norwegian economy was able to withstand the current economic crisis better than most other European countries since Norway's financial institutions did not invest in risky sub-prime mortgage derivatives and other instruments. The country is blessed with oil resources which has become a boon during the past few years when oil prices soared. As a result of this Norway's sovereign wealth fund is one of the largest in the world with assets of about £380B. As the fund has tremendous amount of cash reserves, the fund was able to pick high quality equities at dead cheap prices during the market crashes in the past few months.

In addition, Norway has many advantages relative to other economies of the world. Some of the key points are:

• Norway is a surplus country with NOK 76 billion in current account surplus as of 1Q,2009
• GDP Growth rate for 1Q,2009 was the lowest at -0.4% seasonally adjusted when compared with other Scandinavian countries, UK, Europe and US
• Gross national Savings remain high in Norway at NOK 757 B at the end of 2008
• Households decreased their borrowing and increased savings in Q1,2009
• Government wealth stood at 144% of GDP at the end of 2007, the highest among Nordic countries
• In 2008, due to record high crude oil prices the trade surplus was the highest ever with a total of NOK 460.5 billion

Source:Statistics Norway

Note:1 Norwegian Kroner = 0.15659 US Dollar
For US investors, there is not a single-country ETF for Norway. However there are a few stocks that trade in the US markets.

In the oil and gas sectors, there are four Norway ADRs:

Acergy (ACGY)
Petroleum Geo-Services - OTC: (PGSVY.PK)

StatoilHydro (STO)
Teekay Petrojarl (TK)

Two other large Norwegian companies that trade in the OTC market are:

Telenor - OTC: (TELNY.PK) (Mobile Telecom)

Yara International : OTC: (YARIY.PK) (Chemicals)

Disclosure: No positions

Comments

[skwestorange:]

We not talking about a very small country with a very small, perhaps monolithic population with a large resource base.

Jul 05 05:16 PM

[Albert Meyer:]

Highly ethical managers and government. Government considers employee stock options akin to a criminal activity.

Jul 06 10:05 AM

[jimboy:]

At the moment the Norwegian Krone is actually quite weak against the US dollar. In the long term I can't see anything but the opposite being true as this country is everything that the US (and most other western countries) aren't in terms of fiscal prudence and sound economic management. I am trying to find a way of simply shorting the dollar versus the Kr that isn't too expensive over a period of years. I like Statoil too but as the energy market operates in dollars it is not a play on the Norwegian currency as such.

Jul 12 07:29 AM