FINLAND - Analysts expect Finnish equities to post a growth rate of 22% next year.
But for the moment growth rates for companies listed on the Helsinki Exchange are likely to remain at a sluggish 1%.
According to an annual report by Mandatum Stockbrokers, the main drivers behind any projected growth include Finland’s forestry industry and mobile operators. Profits in the base metal, construction and commerce industries are expected to soften. “Share prices are very moderate in Finland at present. Based on the result estimates for the current year, the average P/E ratio for Finnish shares is now approximately 15 and 13.5, with Nokia excluded. These figures are low by international comparison,” said Erkki Vesola, new chief analyst at Mandatum.
According to these estimates the dividend yield of Finnish listed companies for the current year will exceed 3%, even by as much as 4%. Consequently, Mandatum is now overweight in shares.
On global economic growth, expectations have weakened considerably in the last six months. Mandatum expects GDP (gross domestic product) growth in Western countries to reach approximately 1-2%, rising to 2-3% in 2003. “The downswing in expectations has obviously been a disappointment for the market, but the share price reaction has still been exaggerated,” added Vesola.
“Although the risk of even weaker economic development has increased, GDP growth is not perceived to be heading toward recession. However, we still have a possible scenario where we will not see a significant boost in economy growth in early 2003 either.”
The report - Mandatum Annual Finnish Equities 2002 - is aimed at both institutional and private investors.
Details can now be obtained from [email protected]
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