 |
MARKET DEVELOPMENTS |
|
|
 1991 Den norske Hypotekerforening for 2. prioritetslån with billions of kroner, more than 11,000 bonds and 20,000 borrowers, ends up in compulsory composition. VPS plays an important role in organizing the subsequent payment to bondholders. Thanks to VPS’s register of holders, it is possible to honour all of the bondholders’ claims on the mortgage institution. Photo: The Glacier Museum in Fjærland. Architect Sverre Fehn. Keen interest in Norwegian shares Foreign operators have shown an increasing interest in the Norwegian market. The foreign brokers’ share of securities trading in VPS rose from 14 per cent in 2003 to 25 per cent in 2004. This is almost twice as much as the year before. Foreign investors were responsible for 64 per cent of the securities trading in VPS in 2004 and at the end of the year held 33 per cent of the value of the shares on the Oslo Stock Exchange. In April 2004, for example, foreign investors were responsible for 83 per cent of the trading in VPS, due to the Statoil and Telenor issues. This shows clearly that foreign operators are playing an increasingly important role in our local market. Cross-border trading In view of the current developments in globalization, cross-border securities trading and a common European currency, there is no doubt that the demand for cross-border functionality, and the pressure on risk and prices, will continue. By international standards, VPS’s clearing and settlement system is efficient, functions well and entails a low level of risk for the participants. The growing interest in Norwegian securities from abroad, and in foreign securities from Norway, makes it clear that cross-border trading will have to be simplified. VPS wishes to do its part in ensuring that the Norwegian finance market continues to be regarded as attractive and efficient by local customers and by foreign investors. VPS is therefore working for the registration of foreign securities in VPS accounts, settlement of foreign securities in VPS and efficient settlement of Norwegian securities for foreign operators. Securities clearing and settlement in the Nordic countries The market structure for securities settlement in the Nordic countries differs a little from the European market. The CSDs in the Nordic countries cover functions which, in other countries, are often split between several organizations. Examples of these functions are keeping registers, settlement and handling of corporate actions right down to investor level, and clearing and settlement between securities houses. In other countries, registration of investor accounts and handling of corporate services are carried out in different systems and by a number of institutions. This means that conditions are more suited to cooperation and amalgamation at Nordic level than with markets that are organized differently. CCP - VPS Clearing with a central counterparty (CCP) is a global trend that has been attracting attention for some years. The establishment of a CCP in the Norwegian market has also been discussed. However, there does not seem to be sufficient need for this as yet among Norwegian operators. One of the main reasons is that VPS operates today with multilateral netting system and delivery versus payment (DvP), both of which increase the efficiency of clearing and eliminate the counterparty risk. Use of a CCP can therefore push the price up. As VPS sees it, however, the CCP’s cross-border netting ability can achieve major savings in liquid assets for parties that are involved in several different market places. The need for a CCP is therefore under continuous consideration. Cost-cutting services Companies spend huge amounts producing and distributing annual and interim reports. However, many of them have chosen an electronic solution. VPS Electronic Reports is a cost-effective tool which allows security holders to store all the information relating to their investment in one place (VPS account on the Internet) and saves them having to store paper. In this way, a company can contact its investors more quickly, more reliably and at a lower cost than was possible before. A number of security holders also choose to receive electronic reports of purchases and sales of securities. This is cost-saving for securities houses and easier for the customers. At the end of 2004, the share of electronic reports was about 30 per cent and we are expecting a substantial reduction in the distribution of paper copies in the future. Growth in saving in funds, shares and pensions We expect the growth in savings in securities by private individuals to continue. We see a number of companies and their employees making use of solutions for defined-contribution pension plans by saving in mutual funds. More than 200 companies are now using these solutions and the number is increasing steadily. Net subscriptions in mutual funds are growing and the total assets in Norwegian mutual funds have never been higher. The private customers’ part of this varies, and many of the management companies are investing heavily in developing services and products to help clients to save. In close cooperation with its customers, VPS continues to invest in innovation and upgrading of its systems in order to simplify securities handling. In the time ahead, VPS will launch a new generation of solutions to serve securities customers in banks, fund management companies and securities houses. This will be a set of services and functions where the emphasis is on simplicity and efficient operation. Many limited companies want to encourage their employees to purchase shares in their own company. VPS has developed an Internet-based service called VerdiPapirSpareProgram (Securities Savings Program). By using this service, employees can, for example, reach an agreement with their employer to save a certain amount each month, which is deducted from their pay and used to purchase shares. This service cuts the costs for the employees and for the company. TOP |
|||