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Helsinki’s stock market development has recently lagged behind that of the United States and Europe.
Prius Partner Portfolio Manager Mika Hekiran I think it’s the sum of many factors and several years of development.
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“The industry structure. We have cyclically sensitive companies, and Russia is very important. We lack those AI companies that are driving the US. Also, the market situation in Europe is weak and interest rates are rising,” says Markkinaaraad’s Heikkilä.
However, Heikkilä reminds that the Helsinki Stock Exchange is a dividend stock exchange.
“When you increase the dividend, the difference narrows a bit.”
Actaeon Investment Manager Samron As a reminder, the rise in US stocks can also be explained by other factors that have nothing to do with market cycles. He also believes that growth will continue.
“The development of US stock exchanges is largely dominated by large technology giants. The winners win in terms of results and making money. Their profit streams are not based on economic cycles, but more on minor big themes. In this sense, I would not be too pessimistic about the future development of the US stock market.”
Market Narrative
This week, the Markets Committee is discussing what summer looks like for stock investors.
Can investors stay for the summer? Or is there anywhere to buy now? Has the U.S. reached the peak of its cycle? Is the Helsinki Stock Exchange worth investing in?
There the portfolio managers will discuss Mika Heikkira Proprius Partnersilta, Danske Bank Seniority Strategy Kesa Kivipelto and Aktia’s investment director Samron.
The Marketing Committee is chaired by the Editor-in-Chief of Kauppalehti Solly Semkina.
You can find previous episodes of Markkinaraad from here.
Danske Bank Advanced strategies Kaisa Kive Pelton The broad-based rise in rates experienced in May in the United States and Europe was due to greater confidence that the economy could withstand rate hikes.
“The so-called soft landing is becoming a reality. Of course, people expect lower interest rates this year, which will make life easier for many companies. It has supported the stock exchanges this year. There are also expectations at the European level that results will turn to growth at the end of the year, which means there are a lot of good things ahead.”
The Helsinki Stock Exchange’s gains for May have been frozen.
Heikkilä says we should focus on earnings season rather than creating indices.
“There are no more disappointments. For example, the engineering sector, which is fully involved in global trade, is doing quite well.”
Heikkilä believes that the Helsinki Stock Exchange is still worth investing in.
“Here you have the advantage of a local market, which means you understand the companies and their contextual factors.”
Heikkilä believes that stock investors currently have the opportunity to make choices based on their investment strategy.
“If there is one investor that clearly goes for growth, it’s the big US tech companies. They are expensive, but growing like crazy. If you are a value investor, the Helsinki Stock Exchange is heaven right now because pricing is lower. Now investors can act according to their investment type.”
Aktian Lang says there is hidden value in the Helsinki Stock Exchange.
“The law of gravity works very well in investing. Big laggards will resume their upward trend at some point, and winners will resume their average trend at some point. There is hidden value in the Helsinki Stock Exchange. I will apply more there, and yes, at some point it will take off from there.”
However, Kaisa Kivipelto believes diversification is a “logical choice for investors.”
“On the Helsinki Stock Exchange, we have a very limited number of sectors and companies. If you look at the MSCI index, our seven largest companies represent about 65% of the market capitalization of the entire Helsinki Stock Exchange. In the United States, the seven largest companies represent 26% of the entire stock market. We have a lot of company-specific risks. In my opinion, global diversification is a wise choice for investors. Finland can be included, but its weight in the overall portfolio should not increase too much unless you are ready to take action.”
See the entire discussion in the attached video link.
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