• Sweden edition
 
Stock market continues downward slide

Stock market continues downward slide

Published: 19 Aug 2011 10:53 GMT+02:00
Updated: 19 Aug 2011 16:17 GMT+02:00

An index of banking stocks was off 3.3 percent in early trading, with SEB and Nordea experiencing the biggest drops. The manufacturing index continued its free-fall, dropping 4.4 percent.

The market had recovered slightly throughout the day 10.30am, with the OMXS closing down 1.9 percent for the day to 277.7, reaching its lowest level since the autumn of 2009.

Exchanges across Europe continued to fall on Friday, in part due to concerns about a possible double-dip recession in the United States.

"The fear of a new recession in the United States is reached dimensions which were nearly unthinkable just a few weeks ago," Close Brothers analyst Rabeya Khan told the Reuters news agency.

During a Friday afternoon press conference, Sweden's finance minister Anders Borg acknowledged the stock market's wild ride was stressful, but that markets were functioning normally.

"The stress level is high, but we nevertheless feel that things are more calm than previously. We've had contact with the authorities and with the exchange, and the exchange is of the opinion that the markets are indeed working," he said.

According to Borg, it's still too early to say how the Swedish economy will be affected by the stock market swings rocking exchanges across the globe, other than that growth will be lower than expected.

"There's a risk that it could develop into something more serious," he said.

"I feel that things in Sweden are relatively stable compared to 2008, but there is a risk that the liquidity problems in southern Europe and Europe's financial system could hit Sweden."

Following Thursday's precipitous fall of more than 6 percent, Swedish investors need time to reflect, according to SEB chief economist Robert Bergqvist, who welcomed a Friday with few statistic reports set to be released.

“People are in something of state of shock after what happened yesterday. I've worked on these issues for 25 years and have never confronted a problem of this complexity before,” he told the TT news agency.

Those with small savings margins or who need money in the short term should probably reduce their shareholdings, he advised.

Bergqvist believes that many investors are going to use the coming days to sit down in meetings and discuss the future and the make up of their portfolios.

“What is the likely economic, financial, and political situation going to be? Clients are very uncertain now and don't know how the situation should be dealt with,” he said.

Bergqvist described the situation as serious, with the risk of recession combined with the fact that many countries have little room to implement measures to defend against the effects of an economic downturn creating a particularly worrisome mix.

Interest rates are already hovering around zero, many countries have weak public finances, as well as budget deficits.

“On top of that there are a growing number of people who are beginning to question the future of the euro,” he said.

The fact that most traditionally available economic tools have already been used also adds to the uncertainty.

“We have to try new avenues now,” said Bergqvist.

Even if the current stock market slide tapers off, Bergqvist projects a rocky road ahead.

The turbulence is simply confirmation that stocks can be a risky investment.

“It's important to think about when you need to use your money,” he said.

The smaller the margins, the more important it is for investors to reduce the amount of shares in their portfolios, he said.

Bergqvist emphasised as well the importance of taking a long-term view.

“As things look now and in the coming years, one should probably invest with a 5 to 10, perhaps 15-year perspective,” he said.

TT/The Local/dl (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

11:48 August 19, 2011 by conboy
The "market" like all chronic human behaviour such as alcoholism and drug abuse now crave yet another tax payer inspired handout in the form of Eurobond obligations. The Euro may be threatened in the short term in it's current form but the truth is that the US dollar is now goosed as a reserve currency but many western institutions will not buy Euro's without political reform in the EU and a Franco/Dutch/German Euro obligation emission. Just what Merkel and Sarkozy have being trying to avoid.

More fun and games from our friends in the financial markets flushed as they are with tax payer inspired bank guarantees. The banks are the biggest social welfare recipients in the Western world and democracy cannot afford them! The market is wrong fundamentally wrong! Hail the holy market!
15:59 August 19, 2011 by Nemesis
Sweden is an irrelevant economy in the grand scheme of things.

Only the European core, US, China, Brazil, Japan, South Korea and India really matter at the present.

@ conboy

The sooner there is an EU eurobond, the better. That would need to be followed within about two months by an EU ministry of finance.

´Then we can turn on the neo-feudalistic markets and criminalise them with laws against short selling entire countries for personal amusement and short term profit at the expense of entire societies.
17:52 August 19, 2011 by Grokh
markets plunge and some people become richer, why not change the name from Stock market to "speculation gambling arena" = you're the house and you always win.
04:12 August 20, 2011 by mkvgtired
Nemesis, there is no doubt that a Eurobond would bring a considerable amount of stability to the Euro. It would transfer more of Germany's economic stability and wealth to the less productive Euro members. I hope this concept does not come to fruition. Not because I want to see the Euro fail. On the contrary, if the Euro abruptly failed it would not just be the European economies that suffered. Global economies would.

That being said, the German tax payers have suffered enough. It is not their job to finance everyone else's overspending. If the Euro can not survive without Eurobonds it is time to cut the rope to the anchors weighing it down. The German citizens did not get the benefits of all of the overgenerous Greek (et. al.) entitlement programs, so there is no reason that they should have to pay for them. Or the French, British, Swedish, US (via IMF), etc. taxpayers either.
Today's headlines
My Swedish Career
American teams up with Swede to beat cancer
Matthew Volsky holding the Gynocoular colposcope which is used for screening cervical cancer. Photo: Gynocoular

American teams up with Swede to beat cancer

When Matthew Volsky first came to Sweden he didn't think he would stick around. Six years and a pioneering invention later he tells The Local about the medical device which is helping save lives around the world. READ  

Swedish organic sales enjoy 'amazing' growth
Arla organic milk. Photo: Björn Larsson Rosvall/TT

Swedish organic sales enjoy 'amazing' growth

Swedes are spending more and more of their food budget on organic foodstuffs, with major supermarkets reporting double digit increases, according to new statistics. READ  

Swedish police warn of rogue pregnant cow
The cow pictured is not the one in the story, and presumably not cranky. Photo: Mike Groll/TT

Swedish police warn of rogue pregnant cow

Police in southern Sweden have issued a public warning about a pregnant cow on the loose, after two people were sent to the hospital after a hustle with the heifer. READ  

SAS and Norwegian suspend Israel flights
Photo: Matt Rourke/TT

SAS and Norwegian suspend Israel flights

About 170 passengers planning to fly to Stockholm on Wednesday have been stranded in Tel Aviv, with flights between the cities cancelled due to a missile striking near the airport. READ  

Sweden demands EU clarity on Bitcoin tax
Photo: Mark Lennihan/TT

Sweden demands EU clarity on Bitcoin tax

With EU countries' treatment of Bitcoin varying vastly, Sweden has asked for clear EU rules stipulating whether or not the cryptocurrency should be taxed. READ  

Google in failed bid for Sweden's Spotify
Photo: Spotify

Google in failed bid for Sweden's Spotify

US Internet giant Google tried last year to buy Sweden-based streaming music service Spotify, but pulled out due to the beefed-up price tag, according to a media report on Tuesday. READ  

Motorists in sticky drama after jam spill

Motorists in sticky drama after jam spill

Drivers in western Sweden were forced to jam on the brakes after a van shed its load of preserves and juices which led to major traffic problems. READ  

Property of the Week
In Pictures: The Local's Property of the Week
Photo: Fastighetsbyrån

In Pictures: The Local's Property of the Week

Why settle for owning a house when you can own part of the island it is located on? This week's property allows you to get your money's worth of solitude while spending some time with your closest neighbour - the sea. READ  

Saab buys Swedish submarine shipyard
File photo: TT

Saab buys Swedish submarine shipyard

Swedish defence and aeronautics group Saab said Tuesday it had completed the acquisition of German heavy industry giant ThyssenKrupp's submarine shipyard in southern Sweden. READ  

Opinion
'The Danish narrative on Sweden is based on a lie'
File photo: Shutterstock

'The Danish narrative on Sweden is based on a lie'

There is a popular narrative that in Sweden people bite their tongues while in Denmark they speak their minds; political commentator Brian Esbensen debunks this, arguing that Danes simply find it easier to criticize others. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching Båstad
Business & Money
Sweden falls to third in global innovation index
Society
Swedish ornithologists keep webcam watch
Photo: Andreas Nordström/Image Bank Sweden
Gallery
Top ten Swedish beach hot spots
Tech
Swedish Wiki vet sets new content record
Blog updates

22 July

Det (The Swedish Teacher) »

"Hej! “Det” is a personal pronoun that can be used in many ways, and it might me confusing if you always translate “det” to English “it”. In this article I will do my best to guide you to how to use “det”. Det replacing a word, a phrase or a clause Let us begin with the less confusing..." READ »

 

22 July

PROTECTING GIRLS FROM ABUSE OF THEIR RIGHTS (The Diplomatic Dispatch) »

"Today (22 July) my Prime Minister, David Cameron, and UNICEF, are hosting the world’s first #GirlSummit in London. The Summit’s aim is to mobilise domestic and international efforts to end the appalling practices of Female Genital Mutilation (FGM) and Child Early Forced Marriage (CEFM). This is a high priority for the UK government and the Prime..." READ »

 
 
 
Photo: Fastighetsbyrån
Lifestyle
In Pictures: The Local's Property of the Week
Photo: Finest.se
Gallery
People-watching July 15-16
Photo: Ola Ericson/Image Bank Sweden
Society
What's On in Sweden
Photo: Lisa Mikulski
National
Hope springs eternal for expat pet shop owner
Gallery
Princess Estelle steals limelight at mum's birthday
National
Swedes risk infants' lives by covering up prams
National
Swede runs for office just using Bitcoin funds
Gallery
People-watching July 11-13
National
Malmö mayor slams Danish beggar ban
National
Swedish anti-abortion midwife sues county
National
Swede's salary chopped for Facebook use
National
Northern Sweden warmest in 90 years
Gallery
'Victoria Day': Crown Princess Victoria turns 37
Politics
Mona Sahlin to fight extremism in Sweden
National
EU tells Sweden to cover up snus flavours
Society
Swede snags assassin role in Tom Cruise film
Lifestyle
Top ten ways to spend a few days in Malmö
Gallery
Swedish summer tourism highlights
Sponsored Article
Introducing... Your finances in Stockholm
Sponsored Article
Introducing... Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

694
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se