27 Nov 2012 10:00

Investment Outlook: The dawn is discernible

The economic recovery has been pushed into the background as policy-makers have dealt with problem-filled political processes. Still, recession risks are down sharply, and there is a growing likelihood of better times ahead. This is the main theme in SEB’s quarterly Investment Outlook report.

For a long time, market players have had a sceptical attitude towards risk investments, based on the problems that have existed and still exist around the world. Capital has flowed out of the stock market and into the bond market. Conditions are now about to change, SEB believes:

“Putting money into stock markets will make more and more sense if there is a greater focus on the recovery. The road to recovery will still be lined with financial risks. Yet opportunities exist, and returns will be generated in places other than traditional industrialised countries,” Hans Peterson, Chief Investment Officer at SEB’s Private Banking unit, says.

Today new value is being generated in countries outside the usual field of vision of Nordic investors. In order to navigate properly through unfamiliar geographic areas, SEB has developed a method for locating and filtering where the opportunities are best. Investment Outlook presents this quantitative country model for the first time. It is based on stock markets, not on the macro-economy.

“The model is one element – a quantitative one – that we use as a tool in our management of global equities, but we have of course supplemented it with qualitative analyses as well,” Peterson says.

Looking at the country model, three countries stand out as the most attractive: Norway, Indonesia and Turkey. Sweden ends up only in 17th place on the list.

“For those who dare to take risks in global stock markets, this model may provide exciting inspiration, especially at a time when capital is shifting from defensive to aggressive positions,” Peterson says.

Click link on the right to download and read full report.