Helsingin Sanomat reported in the morning that Holmen, Stora Enso and Norske Skog are planning to incorporate their newsprint production into a separate company. In the early trading, Holmen and Stora shot up over 5% and Norske Skog 20%, before trading was halted for all three. After two hours of waiting, Stora Enso communicated that such discussions have not taken place. However, the verbalizing also leaves room for other types of discussions having taken place. Norske Skog was vaguer about it simply stating that the company feels that there has to be consolidation but that it does not wish to comment market rumours. This possible canard continues a long line of controversial tabloidesque articles from the largest subscription newspaper from Finland. This particular article was majorly market moving and something we might hear more about.
Norske Skog gave away half of the winnings after the trading halt was cancelled. Stora Enso and Holmen continued to be halted by the financial authorities. Holmen’s release finally came in hours later, also denying such ongoing discussions. Shortly thereafter, Holmen and Stora Enso were reopened for trading and started mildly lower but regained their pre-halt levels for the close.
European Central Bank economists raised growth outlook modestly for 2011. Commentary from the bank was basically that things are returning to normal slowly and that bank will start to gradually end ‘unusual measures’ as things normalize. There was no indication of an impending rate hike. Euro area BNP grew by 1.0% in Q2 vs. Q1 and 1.9% annualized.
Sweden’s Riksbank on the other hand raised their internal interest rate ¼% to 0.75%. The move was widely expected and Riksbank stayed mum about future policy. Krona is at its strongest versus the Euro for two years and announcing an aggressive rate hiking policy would only escalate this trend.
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