Friday, 8 October 2010

08.10.2010

Nordic markets ended the week slightly in the red numbers. The rest of the world breathed a big sigh of relief that expected bad jobless numbers from the US came out worse than expected. It is hoped that this will lead to a bucket load of freshly printed money being poured into the markets once more, so that the fun and games could continue a bit longer before hangover.

The mere speculation that China may punish Norway for the selection of dissident Liu, Xiaobo as the winner of Nobel peace prize goes a long way toward validating the selection. The potential implications of such a move would naturally be felt in Nordic exchanges. The concept of individual and impartial choice of a western entity, that we may see as apolitical as well, as opposed to such issues being discussed with one voice lead to many misunderstandings. When there is a loss of face concept behind it, minor issues get all too much weight.

If history has taught us anything, it is that a lack of critical voices from within is potentially the most dangerous threat of them all. As long as Chinese people can be easily turned against entire nations based on isolated actions or even actions of one people, you need to factor in such a risk calculation to any market decision. Now on the other hand, many of ’us’ seem to take the view of the western media automatically in any situation, and sometimes there is more to it than what comes out of the magic gadgets.

However, it would be wholly incorrect to say that people are afraid to protest in China for personal matters, quite the contrary. This is something that Stora Enso has felt as well. There are apparently dozens of cases where the acquisition of land process has been murky. Stora Enso has large plantations in China that it sees as a long term investment potentially leading to factory decisions later on. Having taken part in land acquisition discussions in China, I can concur that the documents can be nearly an impossible mess to waddle through (not in the least because of questionably validity of a host of those) and that somehow in the end when foreign investment is involved, a solution, even if imperfect one, tends to be brokered and then ’discussions’ concerning the issue rages onward even for years. Needless to say Stora Enso is no stranger to such controversies in other parts of the world as well.

Konecranes admitted it had contacted Demag Cranes AG with a tender for a potential merger, after such rumours had been circulating in press and Demaq’s stock price had shot up in Germany. Konecranes said that Demag’s leadership showed no interest so there have been no further developments. The company feels that there needs to be consolidation in the crane industry in Europe.

Dagens Industri hinted of a potential merger of SEB and Swedbank, citing unnamed sources. Agriculture related stocks were the star of the day after United States Department of Agriculture presented a report on the global grain market, which showed lower stocks, downward production and increasing consumption. Fertilizer maker Yara International rose over 6% on heavy volume.

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