(Updating with full report)
OSLO (Thomson Financial) - Share prices closed lower, led down by DnB NOR on newspaper reports suggesting that the bank could suffer losses due to questionable housing loans, while Tandberg was higher on positive broker comments.
The OSEBX Benchmark index closed 6.34 points lower at 452.92 and the OSEAX All Share index fell 7.75 points to 524.12.
Total turnover amounted to 11.06 bln nkr.
DnB NOR closed 2.2 nkr lower at 77.8, but off its earlier low of 77.5.
The bank's share price was hit by a story in today's Dagens Naeringsliv newspaper, which suggested that the bank could suffer losses of up to 600 mln nkr due to questionable housing loans.
While DnB said it does not have direct exposure to the US sub-prime market, analysts say it does have about 90 bln nkr in these high-risk housing loans.
The Dagens Naeringsliv story quoted First Securities analyst Pal Ringholm, who said he was increasingly concerned about the situation.
Another First Securities analyst, Nils Christian Oyen, said: 'DnB has on its books securitised mortgages, mainly outside the US in Europe and Australia.'
'These are AAA securities,' he said, adding that Ringholm had calculated the potential losses based on recent market developments in the credit markets and widening spreads.
'The estimates are based on ...market valuations... and returns over the last weeks. But at the same time there could be hedges or other positions which could offset any potential losses.'
'We spoke to DNB, they say they have mortgages like every other bank in the world, but 600 mln nkr is wide of the mark,' a broker at another brokerage said. 'Ignore this scare story.'
Storebrand shed 2.3 to 89.6.
Tandberg was 2.5 higher at 127, after SEB Enskilda reiterated its 'buy' recommendation on the stock following evidence of strong market growth during the second quarter.
SEB said statistics for the second quarter from videoconferencing industry analyst Wainhouse Research had illustrated 'Tandberg's strong relative performance'.
According to the statistics, Tandberg had gained market share during the quarter to 39.7 pct of total industry revenues, thus extending its lead over rival Polycom, which fell to 37.6 pct.
The broker has a 175 nkr price target on Tandberg.
Fast Search & Transfer was down 0.04 at 9.7 after the internet search engine technology group won an agreement with an unnamed US government agency for an undisclosed amount of money.
Telenor fell 1.75 to 102.5.
Norsk Hydro was down 5 at 202.5. The company will invest an additional 62 mln nkr in US-based solar energy group Ascent Solar, a producer of super-thin, flexible solar-cell modules.
Earlier this year, Norsk Hydro invested 56 mln nkr in the Colorado-based company, so the Norwegian group's total investment now stands at 118 mln nkr.
Statoil fell 3.5 to 158.5. The oil and gas group has got its first gas from its Snoehvit field, received at its Hammerfest LNG plant in northern Norway.
Subsea 7 shed 0.75 to 129.5. ABN Amro initiated coverage of the stock with a 'buy' recommendation and 168 nkr price target.
The broker said Subsea 7 is a pure play on the fast-growing, high-margin, global subsea construction market. It added that high barriers to entry and scarce capacity are driving up prices, which should aid Subsea 7.
BW Offshore was unchanged at 23.6. The oil and gas offshore services group won a 740 mln usd contract from Brazil's national oil company, Petrobas, for the conversion, installation and operation of a floating production, storage and offloading vessel (FSPO).
The contract is for a total of up to 8 years, including optional periods of up to 3 years after the end of the first fixed 5 years.
Golden Ocean fell 0.15 to 23.45. Shares in the dry bulk shipping group rose earlier in the session on better-than-expected second-quarter results and a positive outlook from the company.
'Overall, on the underlying level, it was a solid performance although there were some derivative losses,' said one analyst, who has a 'buy' recommendation on the stock.
'Market consensus was for 24 mln nkr of net profits and they came in at 25.6 mln nkr,' he added.
Petroleum Geo-Services was 1.75 lower at 129.75, Seadrill fell 1.25 to 108 and Fred Olsen Energy shed 2 to 263.5, while Frontline added 2 to 250.
Aker Kvaerner added 3 to 145. La Seda de Barcelona said it will invest 30 mln eur in a new plant to produce purified teraphtalic acid (PTA) in Sines, Portugal, and will contract Aker Kvaerner for engineering, procurement and management services on the project.
Aker Yards fell 0.25 to 62.
Among other stocks traded today, Schibsted rose 4.5 to 251 and Yara International added 2 to 150.5, while Orkla was 1.5 lower at 88.5, Norske Skog shed 0.6 to 70, Hafslund B was down 2.5 at 142 and Renewable Energy Corporation fell 0.5 to 199.75. michael.delaine@thomson.com mdl/dca COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.