Salmon on the stock exchange: “It’s hard to say if this was a dip or if it was the top for this time”

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Nordea Markets analyst Kolbjørn Giskeødegård is not surprised that anyone chooses to sell out and take a profit on salmon stocks after Wednesday’s earnings rush.

It was an cold morning for salmon stocks on the Oslo Stock Exchange after several of the fish farming companies presented their quarterly results on Wednesday. The seafood index fell 3.5 per cent right after opening.

“Stocks have been near the all-time high, the sector has been very good for a long time. Nervousness is somewhat higher in the market now, and with the negative deviations that were presented today it is no wonder that someone chooses to make a profit,” said Giskeødegård to SalmonBusiness.

“A ten per-cent price reaction is significant. It is primarily related to companies that one is unsure how consistent they deliver. The sum from today’s presentations is clearly negative,” he added.

The analyst believes the stock market has largely ignored the price drop in the spot market for salmon, and that it contributes to today’s price decline.

No light in the tunnel
Giskeødegård highlights Grieg Seafood as the company that in particular delivered clearly the weakest compared to expectations.

“In Norway, they continue to deliver good numbers. But the overseas operations in the company continue to contribute in the negative direction. Canada is delivering poorly and there is no light in the tunnel in the UK,” he said.

“Lerøy Seafood also delivers weaker than expected, and Austevoll Seafood is suffering from this,” said Giskeødegård

Affected by other cyclical sectors
How the market will develop in the future will be influenced by a number of factors, Giskeødegård believes.

“It depends a lot on the price picture of salmon and what it will look like in the future. It’s hard to say if this was a dip, or if it was the top for several of the stocks for this time,” the analyst said.

Factors outside the salmon sector will also affect the price picture in the future.

“Uncertainty in other cyclical sectors will affect, and fish have previously proven to be a safe haven,” concluded Giskeødegård.