On the one hand, there are worries related to the second wave of the COVID-19 pandemic and the economic impact of lockdowns. On the other hand, there are encouraging indications about impending vaccines and a US election outcome that was well received by investors. Central banks and governments are also working hard to create better conditions, while prices of financial assets are fairly high in a historical perspective.
“There may be more instability in the short term, since the powerful stock market recovery has led to greater sensitivity to setbacks. But if we lift our gaze a bit, the forecast for both economic growth and corporate earnings is bright over the next couple of years. Interest rates and bond yields are also extremely low and are expected to remain so for some time to come, which means there are few alternative sources of returns. This will affect relative prices and create tolerance for higher asset valuations,” says Fredrik Öberg, Chief Investment Officer, SEB Private Banking.
One of our theme articles in this issue of Investment Outlook also highlights the potential for companies that pay high dividend levels − a segment that has had a tough time in the stock market for some years, even though high dividends should intuitively be attractive when interest rates and bond yields are low. We now wonder: Has this trend gone too far? Is it time for the revenge of the dividends?
Our second theme article describes the phenomenon called “Industry 4.0”. It outlines modern methods for running an industrial company as efficiently and flexibly as possible. Swedish companies are competing very successfully in this exciting field.
Investment Outlook can be read in its entirety or as a 2-page summary at seb.se/investmentoutlookreport, where you also find a web video.
SEB is a leading Nordic financial services group with a strong belief that entrepreneurial minds and innovative companies are key in creating a better world. SEB takes a long term perspective and supports its customers in good times and bad. In Sweden and the Baltic countries, SEB offers financial advice and a wide range of financial services. In Denmark, Finland, Norway, Germany and the United Kingdom, the bank's operations have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB's business is reflected in its presence in some 20 countries worldwide. On September 30, 2020, the Group's total assets amounted to SEK 3,201 billion while its assets under management totalled SEK 2,054 billion. The Group has around 15,000 employees. Read more about SEB at https://www.sebgroup.com