NOK 17 billion losses for Norwegian unit trust investors (Aftenposten)

Every one of Norway’s one million unit trust investors has lost an average of NOK 17,000 in the past year. A total of NOK 17 billion has been wiped off the value of unit trust investments. Norwegian unit trust funds have been criticized for the way they have been marketing their products. The Consumer Council has recently dealt with a number of cases concerning unit trust funds and shares, and it pays to complain. A short while ago Postbanken was forced to return tens of thousands of kroner to a customer because the bank had not provided adequate information about the risks involved.

Black Monday (Dagsavisen)

Stock brokers were on tenterhooks yesterday. The Oslo Stock Exchange had its worst day so far this year. The turbulence in the financial markets also took its toll of the Government Petroleum Fund. It looks as though the Government will have roughly NOK 1,000 per head of population less to spend than expected in next year’s national budget. In May, when this year’s revised national budget was published, the Government wrote down the Petroleum Fund by NOK 60 billion. But since then the Fund has been weakened by a further NOK 100 billion compared with earlier forecasts.

Unit trust funds making a packet (Verdens Gang)

While ordinary people have seen their savings evaporate from the unit trust funds in which they have invested them, the companies behind the funds have been raking in the cash. Only last year the five largest unit trust fund providers had combined profits of almost NOK 100 million. For even though share prices plummet, the fees and charges demanded by the funds leave them well ahead.

Government monetary policy dubbed "destructive" by union economist (Aftenposten)

"The Norwegian Central Bank’s decision to put up interest rates and the Government’s monetary policy are completely destructive for important parts of Norwegian business and industry," said Stein Reegård, senior economist at the Norwegian Confederation of Trade Unions (LO). Mr Reegård believes the Central Bank’s decisions are not in accordance with its mandate and are damaging companies by keeping the Norwegian krone too strong on the foreign exchange markets. "The aim of the new mandate, which came into effect last spring, was that low inflation should be used as a tool to achieve a stable exchange rate over the long term. This was not supposed to lead to a blinkered emphasis on inflation targets regardless of the cost. The way the Central Bank is now handling the exchange rate issue is much worse for business and industry than the combined effect of this year’s annual wage settlement and tax cuts," said Mr Reegård.

Hospitals face massive cash shortfall in years ahead (Dagsavisen)

The country’s hospital bosses say they are facing a cash shortfall of over NOK 2 billion in the next few years now that they have been forced to put a commercial value on the buildings and equipment they control. As a result of the central government’s takeover of the hospitals, they will now have to be run in the same way as a private company. This means that investments in buildings and equipment must be depreciated over a certain number of years. A cost will therefore be ascribed to the use of buildings and equipment, giving hospital managements an incentive to make better use of their investments – for example by increasing the number of operations carried out in their operating theatres each day.

Passport fraud could lead to new identity checks (Dagbladet)

Widespread use of forged passports could lead to the employment of additional passport control officers and new methods to uncover people’s identities. "Widespread use of forged passports could lead to stricter controls," said Local Government and Regional Affairs Minister Erna Solberg. For foreigners this could mean checking an individual’s identity against the immigration register and the European fingerprint database, Eurodac, in addition to passport controls.

Norwegian politicians warn USA not to launch attack on Iraq (Aftenposten)

Inge Lønning (Con), deputy leader of the Storting’s Foreign Affairs Committee, has expressed his opposition to President George W. Bush’s plans for a major military offensive against Iraq. "Norway should not give any signals which might encourage the USA to launch an attack," said Mr Lønning. The Progress Party is not recommending war at this time, but the party’s foreign affairs spokesman, Morten Høglund, refused to rule anything out. "Every possibility must be held open. We would not reject a military offensive on principle," said Mr Høglund.

Engineers forced into retirement (Aftenposten)

The employment market is ruthless towards older engineers. Companies pile on the pressure to get rid of them before their actual retirement date. And many give way and leave, even though they would like to stay in their jobs longer. This is the conclusion of a pilot project carried out by the Institute of Applied Social Sciences on behalf of a joint committee of the Norwegian Society of Engineers (NITO) and the Confederation of Norwegian Business and Industry (NHO). According to the engineers’ elected representatives, companies are only interested in younger employees and employers lack an explicit policy for their senior staff.

Government’s anti-bullying campaign too expensive (Nationen)

The Government’s new anti-bullying campaign is so expensive to implement that many schools and local authorities are forced not to participate. The Olweus Programme, named after Professor Dan Olweus of the University of Bergen, is the Government’s key measure in its renewed battle against bullying in schools. The Storting allocated funds in the national budget to implement the programme in Norwegian primary and lower secondary schools. Nevertheless, each school must find around NOK 45,000 to pay its share of the costs.

Worth Noting

• In a historic move, Øystein Djupedal, deputy leader of the Socialist Left Party, has reversed his former support for restrictions on Sunday trading and accepted the sale of beer on Sunday’s if local authorities so wish. "The mini-stores, popularly called ‘Brustad booths’, were a blunder. Why should the Storting issue detailed regulations on shop opening hours, maximum size or whether or not it sells beer?" he said. (Verdens Gang)
• Two of the country’s largest providers of unit trust funds are claiming you can expect an annual 13 per cent return on your investment if you buy their unit trusts. Jan Schrøder, section leader at the Consumer Council says this is far too high and slams what he describes as "aggressive marketing techniques". (Dagbladet)
• The Norwegian Red Cross is to transport 250,000 tonnes of food to people in southern Africa, and that requires an enormous voluntary effort. 230 military vehicles are being painted white before they are sent to Durban, from where they will be driven to areas, including some in Zimbabwe and Mozambique, which have been hit by famine. (Vårt Land)
• The Consumer Council has received almost 100 complaints from people who feel frightened by letters from fortune tellers. The fortune tellers say they can predict the lottery numbers and threaten "dire consequences" to those who do not make use of their services. (Dagbladet)
• The father of Johannes Åsheim, the seven-year-old who was killed by three loose dogs, has reacted angrily to the fact that the dogs’ owner is not to be charged with manslaughter. The woman was yesterday charged with failing to keep her dogs in a safe manner and violation of the Wildlife Act. (Dagbladet)
• Norsk Hydro lost almost NOK 1 billion in the second quarter on exploratory oil wells which turned out to be dry. Analysts claim that this makes a possible merger with Statoil all the more relevant. (Dagens Næringsliv)
• The heavens opened and one by one the roads were washed away in Akershus and Østfold counties yesterday. In just twelve hours Akershus and Østfold received 14 days’ worth of rain. (Aftenposten)

Today’s comment from Verdens Gang

As the world’s stock markets plunge, stock market experts have come in for some heavy criticism. It will do them good. Brash recommendations to buy have cost small investors a fortune, and many are probably deeply regretting allowing themselves to be tempted into such a risky market. They were not warned. Professional investors do not regard unit trust investments or purchases of shares from the Stock Exchange’s main list as particularly chancy. But for an amateur on a fixed income any such investment represents a major risk. The rule of thumb is always that you should never invest more than you can afford to lose. Preferably you should be able to let your money stay in the market through any economic downturns – maybe for several years. Most people do not have the knowledge that is necessary to judge the stock market’s risks. This places a heavy responsibility on those individuals who are selling unit trusts and other professionals who sell shares to small investors. But many of these have not taken that responsibility seriously enough. It can be in no one’s interest to lure people into taking a risk that they cannot afford. Not even for the unit trusts themselves, which in the longer term will lose both their reputations and the public’s confidence. And it is just such a long-term perspective the unit trusts are most concerned about – or is it?

Sport

"I have won so many gold medals that I don’t need any more," said Rosenborg coach Nils Arne Eggen yesterday, after Viking had beaten Rosenborg, 2-0.