New Alfa Laval boss can sweeten sour news 2 Feb 2016 The high-flying $7 bln Swedish engineer is being hit hard by collapsing orders in the marine as well as oil-and-gas sectors. Shares dropped 13 pct after a bleak outlook. Incoming boss Tom Erixon needs quick wins. As costs are under control, a share buyback could be his best bet.
H&M suffers from rare wardrobe malfunction 28 Jan 2016 The Swedish fast-fashion retailer said discounts on a glut of winter wear would weigh on sales. H&M is a little less efficient than chief rival Inditex, and the strong dollar isn’t helping either. Still, both are in a different league from most peers.
Sweden can be trailblazer for global rate-setters 19 Jan 2016 Small countries sometimes lead the way in monetary policy. Sweden can begin to challenge the global obsession with inflation-targeting by pursuing central bank reforms outlined in a new report co-authored by former Bank of England chief Mervyn King. This shift is overdue.
Sweden ignores Swiss lesson on FX intervention 5 Jan 2016 The Swedish central bank is talking about intervening to curb the inflation-dampening strength of the crown. Its own history and the experience of Switzerland, which spectacularly abandoned attempts to cap its currency almost exactly a year ago, augur failure.
Electrolux’s GE failure leaves only faint stains 7 Dec 2015 The Swedish group will be deprived of extra growth after a U.S. acquisition was scotched by trustbusters, who felt that owning GE’s appliance unit would give Electrolux overmighty pricing power. The $1 bln fall in Electrolux’s value suggests investors never held such hopes.
Short-sellers threaten to tie TeliaSonera in knots 19 Oct 2015 The Swedish telecoms group has rejected a claim by short-seller Muddy Waters that alleged graft could lead to big writedowns. Even if that analysis is flawed, the distraction comes just as TeliaSonera’s management is mired in a desperate strategic rethink.
Ericsson miss could give investors deal envy 23 Apr 2015 Shares in the Swedish telecoms kit maker fell 8 pct after margins in its networks arm missed expectations. Ericsson’s issues, including sluggish North American growth, aren’t surprising. But rival Nokia’s tie-up with Alcatel should focus minds on whether it also needs a deal.
Sweden shows ultra-easy policy is contagious 12 Feb 2015 The Swedish central bank has cut repo rates below zero. It’s also buying $1 bln-plus of sovereign debt. With plentiful stimulus in the euro zone, U.S. and UK financial systems, states that don’t take a tough anti-deflation stance risk seeing their currencies spiral.
Sweden’s bold zero rate won’t fix deflation 28 Oct 2014 While other countries mess with tiny numbers, the Swedish central bank has set its policy rate at an unequivocal zero. The boldness is striking, but the Riksbank hasn’t resolved the global mystery of inflation falling when growth is reasonable. Nor will zero reverse the trend.
Most of the heavy lifting lies ahead for Volvo 24 Oct 2014 An unexpected earnings jump propelled shares in the Swedish truck maker up 10 pct. But Volvo is facing an uphill struggle. The outlook for its core European market is weak, and its new cost cutting targets are ambitious.
Electrolux on better side of $3.5 bln GE deal 8 Sep 2014 The Swedish firm is buying GE’s U.S.-focused appliances unit in an all-cash purchase part-funded by a rights issue. It’s a win for Electrolux. The U.S. market for ovens, fridges and dishwashers is more attractive than Europe’s, and scale helps offset raw material cost pressures.
South Korea repeats Sweden’s monetary mistake 5 Sep 2014 Finance Minister Choi Kyung-hwan warns the country is entering “an early stage of deflation”. That’s a swipe at the Bank of Korea, which has kept borrowing costs unsuitably high. The central bank’s strategy, similar to the Swedish Riksbank’s now-abandoned approach, has backfired.
Falling euro squeezes Swiss, Swedish central banks 29 Aug 2014 A lower currency helps the ECB fight disinflation. It’s a curse for Swiss and Swedish central banks, which are running out of traditional ways to stop an unwanted appreciation in their currencies. They may end up having to follow the euro zone into less charted policy waters.
Sweden is a lab rat for fighting deflation 3 Jul 2014 The Nordic nation has slashed interest rates more than expected. Sweden is a small, open economy with an independent central bank. So this will be an excellent post-crisis test case of the power of monetary policy to fight deflation when asset prices are rising. It won’t be easy.
Sweden shows monetary rigour not fatal for assets 29 Apr 2014 Economist Paul Krugman’s critique of overly tight central bank policy has lately been directed at Stockholm. Some investors level similar charges against the ECB. At least the Swedish experience shows that financial assets can withstand a period of negative inflation rates.
Pfizer tax arbitrage will hasten more deals 29 Apr 2014 The biggest charm of the U.S. drug giant’s $99 bln offer for the UK’s AstraZeneca lies in switching to a lower-tax domicile. The latest and largest such deal raises the odds Congress will tighten rules. Until then, Pfizer’s validation of the tactic will encourage copycats.
Scania holdouts risk overplaying their hand 24 Apr 2014 Some minority investors oppose Volkswagen’s $9 bln bid for the rest of the Swedish truckmaker. But saying “nej” is risky. VW has effectively tied its hands, making a sweetener unlikely. The premium is already generous. If the buyout fails, Scania’s shares could fall steeply.
Volkswagen has no reason to improve Scania bid 18 Mar 2014 Minority owners of the Swedish truckmaker want more than the 53 pct premium offered by Volkswagen. They’re right to try, but limited medium-term synergies don’t justify topping up a generous bid. Sadly the German carmaker can still fall hostage to its executives’ oversized egos.
VW’s $9 bln Scania bid puts own investors second 24 Feb 2014 The German automotive group is offering a 53 pct premium to the Swedish truck maker’s minority owners. Cost savings cover the gap on paper but will take up to 15 years to materialise. And VW investors must stump up $2.7 bln while seeing little short-term benefit.
Atlas Copco expands smartly into a vacuum 19 Aug 2013 The Swedish group is buying Edwards, a UK vacuum-technology specialist. The $1.6 bln deal looks both logical and inexpensive. Luckily for Atlas, the buyout firms behind Edwards were keen to exit an old investment, after a brief and underwhelming experiment with a U.S. listing.