Stockholm Stock Exchange woke up with positivity on its face and initial trading in positive territory


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Wednesday, 31 August 2011
Stockholm Stock Exchange began Wednesday with rising prices. After about a half hour of trading had OMXS index was up by 1.1 percent.

At about 10:30 Swedish time, the OMXS30 was up 1.3 percent to 942 points. Turnover on the Stockholm Stock Exchange stood at Skr2.6 billion, while the combined net sales, which also includes Burgundy, Chi-X, Turquoise and Bats was Skr4.2 billion.

The increase is in line with the leading European stock exchanges and stock markets in Asia.
Telecoms Company Ericsson leads the way up by 1.5 percent to Skr70:80 at the start of trading. The company sees a growing demand within the service area and the company is launching a new business in China, which will initially employ around 300 staff. Already within three to six months it will be expected to grow its headcount to 500 workers there according to a press release from Ericsson.

Among other drivers of the market today has to do with the minutes of the last meeting of the US Federal Reserve's interest rate committee, the FOMC, which showed that further quantitative incentives are discussed.

The protocol, published on Tuesday evening, showed that several members wanted to see stronger measures to stimulate the U.S. economy and reduce unemployment, already at the next meeting.

The members, who are not identified, said that "recent economic developments justify ”more substantive” decisions in addition to the commitment to keep interest rates low until mid-2013.

On the negative side in Tuesday's news showed the American consumer confidence which fell to 44.5 in August, against an expected an index of 52.0.

In Sweden the national Institute of Economic Research, NIER, says in its forecast that the economic upswing in the global economy and in Sweden is slowing. The national institute's forecast for Swedish GDP growth this year now stands at almost unchanged 4.3 percent. For 2012 the forecast was down by one percentage point to 1.9 percent, and for 2013 growth is projected at 3.4 percent.


In Stockholm, the engineering sector drove the way as well as the telecoms up. Banks rose, but could not keep up with the index.
SKF, Sandvik, Atlas Copco and Alfa Laval have improved recommendation from Outperform, which gave a lift to its shares in initial trade. Assa Abloy was also given recommendation for its market performance.

SKF B shares rose 2.5 percent to Skr 146:60, Sandvik was up 2.9 percent to Skr 82:40. Alfa Laval advanced 1.7 percent to Skr123, while Atlas Copco A shares was up 1.9 percent to Skr 140:60. Assa Abloy advanced 1.8 percent to Skr 144:70.

UPM-Kymmene plans to reduce its paper capacity in Europe with 1.3 million tonnes. Two mills will close permanently and 1170 employees will leave the company. In addition, a planned permanent closure of a paper machine at Ettringen, and temporary closures of other paper machines.

The news pushed up Stora Enso by 5.5 percent to Skr 46:58. Holmen was strengthened 2.6 percent to Skr 176:60.

Morgan Stanley lifted on Wednesday morning Fabege recommendation to overweight from light weight, with a lowered price target to Skr63 from Skr76. Even Castellum was raised to overweight from underweight earlier. The target price is lowered to Skr97 from the past Skr102.

Fabege rose 5.5 percent to 59:65 crowns, and Castellum advanced 3.3 percent to SEK 92:60.
Credit Suisse lowers its price target for Ericsson to Skr95 from the previous Skr100, but retains Outperform’s recommendation.

JP Morgan also cut its price target for Ericsson to Skr75 from Skr83 before, but retains a neutral recommendation. Ericsson shares were up 1.7 percent to Skr 70:95.

Among the smaller companies, Alltele fell by 7.9 percent to Skr26:70 after delivering a profit after tax of Skr 4.7 million for the second quarter and reiterated forecasts for revenues of over Skr 800 million in annual terms at the end of this year.

In Chicago purchasing managers index for August will be out at 15:45, and statistics on industrial orders in the U.S. in July, at 16.00. At 16.30 leaving the DOE weekly report on U.S. oil stocks.
By Team

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