Experts warn of sinking stock prices
Swedish and American stock market players warn that markets will plunge next year due to a double-dip recession.
| Related news: • Swedish stocks 'have not reached the top' |
Dan Sten Olsson, chief executive officer and largest owner of the Stena sphere, warned Wednesday of a potential backlash at the Stockholm stock exchange. The Stena shipping and industry conglomerate holds a portfolio with a total value of 5.5 billion kronor (€540 million, $785 million).
“The economic development is an element of uncertainty with the risk that industrial production won’t speed up and that unemployment will increase. It will hit stock listed companies' profits and will cause a dip on the market in 2010”, Dan Sten Olsson told business daily Dagens Industri.
In response to the gloomy forecast Stena has sold off stocks, especially shares in Swedish drugmaker Meda. Last year the Stena sphere lost 2 billion kronor on financial investments but is 1 billion kronor in the black so far this year, according to the newspaper.
Meredith Whitney, founder of Meredith Whitney Advisory Group LLC, warned Tuesday about a US double-dip recession, where the economy quickly falls back into recession, and overvalued bank stocks.
“I haven’t been this bearish in a year” she said in a CNBC television interview. “I think you can sit on cash for a little bit, because you have to wait for a leg down in valuations".
The Standard and Poor’s 500 Index has rallied 64 percent since touching a 13-year low on March 9, according to Bloomberg. The OMX Stockholm index is up 46 percent since the turn of the year, in local currency.
However, analysts’ outlooks at the moment are sundry and mixed-up. Last week Martin Guri, equity strategist at Nordea, told The Swedish Wire that “We have not reached the top" and that stock prices are expected to continue up.
"The increase on the market will, according to my expectations, continue even next year as earnings outperform expectations and economic forecasts are revised upwards”, he said.
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Last Updated (Wednesday, 18 November 2009 10:35)
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