– 2021 can be really good – E24


Vaccine optimism has accelerated stock markets around the world. Here at home, the stock exchange has recovered almost the entire year’s corona loss. But the rise also means the most expensive stocks in decades, according to stock strategist Paul Harper.

Chief strategist Christian Lie at Danske Bank

Cicilie S. Andersen / E24


– We have had a very nice November, says chief strategist Christian Lie in Danske Bank to E24.

The Oslo Stock Exchange is now roughly back to the levels it was before the corona crisis hit the world, after a sharp rise recently.

The main index is around 908 points on Friday, up from 636 points at the lowest in March. In November, the Oslo Stock Exchange gained momentum with an increase of 12 percent so far.

The image of a stock market rise is also being incorporated elsewhere. The market in Europe is up 14 percent so far this month, while the rise in the US is close to ten percent.

– It is time for the best month for European shares ever, says Lie.

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Vaccine optimism

Equity strategist Paul Harper in DNB Markets points to vaccine news and US elections as two important factors in the rise in equities.

– It has been a very strong acquisition. It is not easy to see that we are still in a partially closed situation in the economy. But the stock market is willing to look through it, when there has been news about the vaccine, says Harper.

– The upswing we have seen in the last period has mainly been driven by the vaccine, plus one is fairly comfortable with the outcome of the election in the US, he says.

Equity strategist Paul Harper in DNB Markets


Lie says the progress of the vaccine work “opens up for us to see the beginning of the end” of the pandemic.

Several pharmaceutical companies have reported breakthroughs in the work of developing effective vaccines against the coronavirus.

On Friday, the companies Pfizer and Biontech applied for urgent approval for their corona vaccine with the American drug authority FDA.

The company Moderna has also reported an effective vaccine.

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– 2021 can be really good

At the same time as positive vaccine news is ticking in, both the USA and Europe are in a wave of infections, and several European countries have again introduced restrictions to curb the infection. It again affects economic activity.

“What we see as the big question is how patient investors will be in maintaining their optimistic positions, ahead of what could be a rather heavy period of covid restrictions,” says Lie.

– Not only in Europe, but also in the US, and with weaker economic key figures than we have been used to seeing now in recent months, he says.

Danske Bank expects the eurozone economy to shrink again in the fourth quarter. Lie believes that the wave of infections in the USA increases the risk of restrictions there as well, which can “force the economy down to its knees”.

– We are moderate optimists in the short term, considering that we will have a weaker economic development, but at the same time see potential for 2021 to be really good, he says.

The reason is expectations about the distribution of the vaccine.

– Because then we not only get a vaccine-driven rebound in the service sector, which has ripple effects on the entire world economy, but we also have very good conditions for strong growth in company earnings, says Lie.

He points out that earnings are set to rise by 30 per cent for global equities next year, and that central banks and public authorities will continue to stimulate the economy.

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Highest pricing since 2001

The stock market rise here at home has taken place even though earnings in the companies have fallen. This means that the pricing of the shares, measured by the ratio between the share price and the companies’ result – the ratio P / E, has risen significantly.

According to Harper, pricing based on P / E is higher than at any time throughout the period from 2001–2019.

– The multiples on the index have increased a good deal in 2020. For the year, the P / E multiple has gone from 14.5 to just over 18. It has been assumed that earnings will return eventually.

– It probably does, but the question is how soon it will return. We need enough help from the oil price if we are to be able to grow into the pricing we currently have, he says.


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