Sweden

Swedish virus outcomes will be hard to copy

12 May 2020

The only Western state not to enforce a lockdown has a higher death rate than Nordic peers but lower than Britain or Italy. Its economy will emerge less scarred. But that’s also because of generous welfare and the fiscal room it’s using to compensate companies for lost sales.

Corona Capital: Extended Stay, Victoria’s Secret

22 April 2020

Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.

Corona Capital: Pemex, Bond liquidity

20 April 2020

Concise views on the pandemic’s corporate and financial fallout: Pemex becomes world’s chunkiest fallen angel, and bond liquidity gets a needed boost.

EU banks get scary bad-debt warning from Sweden

8 April 2020

Swedbank’s first-quarter impairments jumped tenfold from a year earlier because of Covid-19. That’s despite a relaxed Swedish attitude to lockdowns and lenders’ accounting wiggle room. A similar spike across Europe would wipe out most profits for 2020, and bigger hits may come.

Geely picks odd timing for Volvo IPO reboot

10 February 2020

After abandoning a $30 bln flotation of the Swedish carmaker in 2018, its Chinese owner wants to combine it with its Hong Kong unit, and list in Sweden. A merger might create savings. Yet any benefit will be overshadowed by a tough domestic market and the coronavirus fallout.

Uncle Sam’s 5G telecom fantasy is M&A nightmare

7 February 2020

Attorney General William Barr thinks the U.S. could buy Nokia or Ericsson to counter China’s Huawei. But making private firms do the state’s bidding is not how America works. Wrapping suppliers in the flag would also destroy value. Selling shareholders would be the only winners.

Ericsson gives glimpse of pain from 5G squeeze

24 January 2020

An earnings hit from a U.S. mega-merger is only one headache for the $28 bln Swedish telecoms firm. Britain appears to be throwing a lifeline to Chinese rival Huawei. And mobile operators are pushing hard to break the pair’s grip over the $500 bln market for next-generation kit.

Soaring Swedish buyout shop looks overpriced

23 January 2020

The share price of $13 bln EQT has almost doubled since its September IPO. CEO Christian Sinding can point to good private-equity returns and a rapid rise in assets under management. That success may be harder to sustain given increasing competition for deals and capital.

Buy now, pay later faces Juul-style backlash

24 December 2019

Companies offering the credit innovation say it can drive online sales and help retailers deal with refunds. One player, Klarna, is valued at $5.5 bln. But making it a lot easier to shop for free could prompt a reaction like that which befell the vaping heavyweight.

Sweden will manage a singular rate rise

6 December 2019

The Nordic country’s rate setters want to lift the policy rate out of sub-zero territory in December. Sluggish growth, lower inflation and trade weakness mean they face a high burden of proof to justify such a move. Their explanation may not stretch to a second hike anytime soon.

Hadas: Sweden raises tone of negative rate debate

6 November 2019

Its central bank plans to increase the policy interest rate to zero. Current conventional thinking says that is a step in the wrong direction. But there are reasons to worry about minus signs on rates. If the economy emerges unscathed, others may copy the Swedish experiment.

Ericsson’s upbeat 5G forecasts still too cautious

17 October 2019

The Swedish telecom equipment maker has raised its 2020 sales targets by 10% to reflect strong demand for the superfast networks. Yet given market leader Huawei’s U.S. problems, that still looks conservative. The perennial underperformer may have turned a corner.

Economics Nobel prizes mix of realism and idealism

14 October 2019

A trio of economists, including Esther Duflo, won the award for detailed studies of what helps alleviate desperate poverty. Their secret: using a well-established scientific method. The technique has problems, but is far more realistic, and useful, than much economic theory.

Nobel Prize for batteries has a negative side

9 October 2019

The Swedes awarded this year’s chemistry gong to the creators of the lithium-ion battery. Its use in everything from smartphones to cars should help the energy business become more climate-friendly. But the technology creates some of its own pollution, resource and social risks.

Europe’s $8 bln buyout star outshines U.S. rivals

24 September 2019

That’s the market value of Swedish firm EQT after its share price popped 25% on its first morning. The valuation makes sense if pension funds and others keep pouring cash into private equity. Still, the premium to larger and more diverse groups like Blackstone is striking.

Ikea doubles down on China’s risky smaller cities

24 September 2019

The Swedish furniture giant will pump $1.4 bln into expanding its operations in the People’s Republic, joining Starbucks and others seeking fresh growth in poorer provinces as mature coastal markets slow. In key aspects, however, China's interior is falling behind, not catching up.

Climate-activist investors are due for a new dive

3 September 2019

Treating and moving water can account for 20% of energy use. And many companies are ignoring the risk to their operations of too much or too little of the liquid, judging by a recent industry conference. That presents fertile ground for pushy stock- and bondholders.

Swedish buyout firm places faith in public markets

2 September 2019

EQT may raise $550 mln in an IPO, soon after rival BC Partners raised a similar amount in a private sale. Both want to grow abroad and in credit and real estate. Yet choppy markets and the difficulty of valuing private equity firms make EQT CEO Christian Sinding’s job harder.

The Exchange: Banking on water

27 August 2019

Wall Street is diving into climate risk - with the exception of water. Torgny Holmgren of the Stockholm International Water Institute explains how that’s starting to change and how properly valuing the asset and smart use of technology are key to solving the crisis.

Wall Street mistakes water for a business washout

26 August 2019

Big banks and investors are thin on the ground at water confabs, including this week’s bumper affair in Stockholm. Yet clean, fresh supplies are increasingly scarce. The economic and financial implications interact with climate risks, too. The finance whizzes are missing out.