Stockholm Stock Exchange the worst performer in the Nordic region


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Saturday, 20 August 2011
On Friday, following a gloomy period on the stock markets worldwide, the Stockholm stock exchange closed with a loss. It ended the day with a fall of 1.9 percent and an onlooker may feel that its okay – all stock markets fell all the same. But that is not the case, the Stockholm bourse has fallen by about 25 percent only within the past three months. Only the Frankfurt Stock Exchange, the DAX Index, which has declined more by 28 percent.

On Friday's weak closing, the Stockholm Stock Exchange, the OMXS index dropped by 1.9 percent to 277.7.  Looking around, a similarity could be seen in Germany where for the last three months only, Frankfurt Stock Exchange, has had a negative development.

The under core reasons attached to this fall have been tied to the U.S. economic weaknesses and the eurozone financial crisis which, analysts attribute to the fact that the Germans are more directly exposed to the Euro crisis.  It seems to German investors, and the world that investing in a Germany stock could lease that investment exposed to troubled euro areas given that Germany is seen as the moderator of the Euro zone economy.

But the situation in Sweden is different. As the year 2011 opened on the Stockholm stock exchange, the level of negativity here has remain constant. The situation on the OMX this year needs a different approach to study it because it defies most theories as to how the stock markets behave.

For example, the Swedish economy has been performing well with above average GDP reports – when compared to others such as the UK, Denmark, etc.. Swedish seasonal companies have been reporting impressive performances. Although most manufacturing companies have complained of rising raw material costs, these could not be the reason why the Stockholm market had to be so negative the way it turned out to be.


The market could also have expose something about the Swedes not previously thought before – their ability to totally shy from any form of risky situation. It looks like the perception that the market would ride in a roller coaster manner this year just gave the Swedes to maintain permanent scepticism on the market.
In Copenhagen, the market has fallen by 18 percent in three months while the stock exchanges in Helsinki and Oslo are down by 20 percent each. Stockholm is thus the lowest in the Nordic countries.

Some analysts attribute the sensitivity of the Stockholm Stock Exchange to that it reacts quickly because of the many export oriented companies that are listed here. As such its attitude could be seen as justifiable. Many investors do not seem to realize how sensitive the Stockholm Stock Exchange is, according to a market analyst.

Meanwhile, stock markets in Indonesia and Thailand have increased their positions by five and four percent respectively over the past three months.
There are countries with domestic economies that are growing, consumption is picking up and they are not as involved in the West European problems according to analysts. In the United States the markets there have fallen by 14 percent the last three months. In Japan, the decline is 13 percent while the stock market in China dropped 18 percent.
By Team

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