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SHARES

Stockholm shares recover

Shares on the Stockholm exchange rose during trading on Monday, following heavy falls late last week.

Published: 13 August 2007 16:58 CEST

The trend in Stockholm mirrored rises in other European markets, and followed increases in Tokyo and Hong Kong earlier in the morning.

Stockholm’s OMXS index fell sharply at the end of last week amid fears of a credit crunch. The collapse of sub-prime mortgage lenders in the US was at the root of the concerns.

By 2:20pm the OMXS index was up 2.5 percent at 388.0. Among the winners were Volvo, up 5.8 percent, and Scania, up 5.0 percent. Lindex increased 15.7 percent to 103 kronor, which is one krona more than rival Kapp-Ahl offered for the company in an unsolicited bid on Monday morning.

Construction company Peab rose 9.7 percent and SAS rose 6.7 percent. H&M was up 0.5 percent to 195 kronor.

Shares in OMX fell somewhat. Borse Dubai, which has been building up a major stake in the Swedish stock market operator, is expected to formally inform OMX of its intentions this week. Borse Dubai is also expected to buy a significant stake in the London Stock Exchange (LSE) this week.

The recovery on international markets is due largely to the fact that the major central banks have made money available to banks hit by the US mortgage problems.

Stockholm stock market hits new all-time high

The OMXS closed at 430.6, besting by more than three points the previous record of 427.2 set in July 2007.

"Finally, after more than five years, we've come up to the all-time high," Nordea stock strategist Martin Guri told the TT news agency.

The Stockholm stock market's advanced was in line with developments on other exchanges around the world, and can be attributed to a new World Bank forecast indicting advances in global economic growth. Strong retail sales statistics from the United States helped as well.

Guri rejected any notion that the Stockholm exchange's recent rise was any sort of bubble, but is simply a continuation of a strong 2013.

"We had the worst financial and economic crisis since the 1930s. Now we can say that we've left it behind and are moving on to the next chapter," he said.

"The market could rise somewhere between ten and 20 percent this year."

He added that there are many signs of economic improvements, and while economic growth may not be strong, risks have deteriorated, bolstering investor confidence.

Guri cited central banks in the US, Japan, and the eurozone for stimulating stock market growth.

"They've promised financial markets they plan to keep interest rates low," he said.

Wednesday's OMXS rise was led by heavyweights such as retailer H&M and bank Nordea, which climbed 2.7 percent and three percent, respectively, as the Swedish fashion retailer reported better than expected sales results for December.

Other market winners on Wednesday included pharmaceutical firm AstraZeneca, telecom equipment maker Ericsson, and truck maker Scania, all of which rose by around two percent.

The Swedish krona weakened slightly against the dollar, which can now buy 6.48 kronor. The krona-euro exchange rate remain unchanged, at 8.80 kronor to the euro.

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