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Leading managers wait for Nordic bounce

On Tuesday, the deputy governor of Sweden's central bank said the country has so far been able to handle the challenges of the global financial crisis. However he also said he expects the negative consequences for the Swedish economy to be considerable over the next two years.

Citywire asked two highly-regarded Swedish fund managers, A-rated Peter Rönström of Lannebo Fonder and formerly AAA-rated Erik Brandström from Spiltan Fonder, for their views on the Swedish stockmarket and economy.  

Erik Branström, founder of Spiltan Fonder, handed over the reins of the Spiltan range of equity funds to his colleague Pär Andersson last September but he still remains in control of the fixed income portfolios.  

‘We don’t do forecasts but on a general level I believe that lower interest rates, a weaker SEK, a massive financial support in the marketplace and a building backlog in demand after a period of standstill - alongside the lack of interesting alternatives to shares - will  eventually bring the stock market back on a positive track. Whether it will take place in three, six or 12 months is the big question,’ said Branström.  

‘I do not believe that it is possible to single out one, or a few, factors or indicators. It will be more of a general market movement… if you look for sectors, probably interest-sensitive and cyclical sectors,’ said Branström.  

Peter Rönström, founder of Lannebo Fonder, has already made his move although he believes the economic pain is not yet over. ‘The first half of 2009 will be tough; however we changed the portfolio at the end of 2008 out of defensive stocks towards Swedish exporting and cyclical companies. We think the market is near its bottom in Sweden even if the real economy will delay its recover alongside the world economy,’ said Rönström.

Rönström runs the Lannebo Småbolagsfond that has posted 131% since inception while the OMX Stockholm Benchmark TR index has fallen 32.22%.

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