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Tuesday, March 5, 2024

Chance for revenge for the Helsinki Stock Exchange

Globally, the stock market developed surprisingly positively last year, with one exception: Finland, which was among the worst in the world. The Helsinki Stock Exchange ended the year 6 percent down.

One reason was that companies that weigh heavily in the Helsinki Stock Exchange’s large-cap index, such as forestry companies and basic industries, have had difficult times. And Nokia, which is also heavily weighted in the index, has its own particular problems.

This year there is an opportunity for the Helsinki Stock Exchange to take revenge. That’s what the Bank of Åland’s equity strategist says Tanja Wennonen-Kärnä.

– Positive signals have come, among other things, from the forest companies. In the same way that some large companies depressed the Helsinki stock exchange last year, there are some large companies that can lift the stock exchange this year.

Sectors where Wennonen-Kärnä sees positive trends are cyclical, i.e. cyclically sensitive industries such as basic industry and engineering, as well as companies that sell to the consumer market. When inflation comes down, people’s real incomes increase, which is expected to increase demand.

Another category with potential this year is small companies. In recent years, these have been hit much harder by the interest rate increases than large companies, because small companies generally do not have access to financing options other than bank loans. This means that they are immediately affected by higher interest rates. Now they can instead benefit from lower borrowing costs.

The Bank of Åland’s equity strategist Tanja Wennonen-Kärnä.

High values ​​in the USA

Globally speaking, Japan is the stock market that has performed best recently, while the development in the so-called emerging markets has been the worst. China a question mark, among other things as a result of the problems in the real estate market, deflation and a record low currency.

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