Upload
seb-group
View
216
Download
0
Embed Size (px)
Citation preview
8/3/2019 SEB report: Hopeful start to the investor year
1/35
InvestmentOutlook February piv bkig - ivm gy
u wud h c
8/3/2019 SEB report: Hopeful start to the investor year
2/35
3Investment OutlOOk - ebruary
Contents
Sg
odcio..........................................................................................................................5
S ...............................................................................................................................6Mco ...................................................................................................................8
Pooio co: Mod Pog.............................. ............ 10
Th: Spi wiig od h co ................................ .................. 13
Th: Pocig o gi o cop ............................. ........................ 17
CL
Eqii................. ................................. ................................ ................................ ............. 20
Fixd ico ............................. ................................ ................................ ........................ 24
Hdg d ............................. ................................. ................................ ........................ 26
R ................................ ................................ ................................ ......................... 28
Pi qi ................................ ................................. ................................ ................... 30
Coodii ............................ ................................ ................................ ......................... 32
Cci ................................ ................................ ................................. ......................... 34
8/3/2019 SEB report: Hopeful start to the investor year
3/35
4 Investment OutlOOk - ebruary
Thi doc podcd SEB coi g ig ioio o i i podc. Ahogh h co i d o oc jdgd o
i, SEB wi o i o oiio o iccci, o o o who which i o ic o i. i ch i d o,
o hod i poi d h po d h dico coid wihi i, o d h dico ig o pcic copi od o www../
dici. oio ig o x co odd d o o idiid cicc. Sg c d oio io
copi coio d ppi o xd piodici o i i codio. Dico o pio codio hio oid
po q. A pod SEB hod poiio i qii o qi-d i o copi o which h poid codio.
Mo ioio o SEB i codio d i g o coic o i c. c od hp://www../ppig.
(i Swdih). Hioic o d d oh ci i o g o . Th o o d i o oh ci
i ih i o , d i i o ci h o wi g c o id cpi. o c, o c xcd h iii o id.
Wh ih d o o i i cii doid i oig cc, chg i xchg c ipc h . Yo o poi
o o i dciio d o hod w oi did ioio o ig h. Fo o ioio p i i h ipid
popc o d d ioio och o d d o cd podc, i www... c o hod dic iod o
o idiid cicc o o SEB dio.
i u x: A co o o io Pi Big ofc i Lxog, Sigpo d Swizd o oigd o piod o h x ppic i h coi o o ciizhip, idc o doici wih pc o cco d ci cio. SEB do
o poid x poig o oig coi ig h o o poid cocd hoii wih ioio d wh qid.
pGo Hd o Sg
+
h.po@.
L gu Go Hd o Mco Sg
+
.p@.
vc d OlPooio Mg d Hd o S Lxg
+
Jh h Sgi
+
joh.hgh@.
Hd o S Now+
Cl bwGo Hd o Adio T
+
c.ow@.
J ldEcooi
+
jo.do@.
kEcooi
+
Dl gcEcooi
+
di.gc@.
ClFl cEcooi
+
c-ip.oc@.
Ccl khGo Hd o Coicio T+
ccii.oho@.
Lz bwCoico d Edio
+
iz.w@.
Thi po w pihd o F , .
co d o ioio i o F , .
Sg
8/3/2019 SEB report: Hopeful start to the investor year
4/35
5Investment OutlOOk - ebruary
Times change, and so do perceptions o what
is a good and a bad risk in the capital market.
Right now a certain calm has descended over
nancial markets. But behind todays orecasts,
new tensions and issues are building up globally,
which will increasingly aect our investor world.
Sic g, w h who w d i go
cpi . Wiig o i h g icd,
d w h gi ig poi i i ppi
ic No . Th owd dg c h
Eop C B (ECB) oo cio. P ip,
d h hig i od o o: iqidi, cooic
d d o io. c oh, h
h o h igh id.
Woh cig o i h dig hi piod o jo,
-chig dciio h d i od o o h
og- po o h o zo. i, o , h -
c o h ECB o o pp wih iid iqidih h do h jo o iig i ppi.
Mwhi w o h GDP oc o ic-
ig gopd od gowh j o h wh
w xpc o gowh i po. Th cod h o h
i xpcd o h h , d w h -
o o dg o hop h hd. Soi wh h
co i i io, h xpcd c hpp.
igh o h o, i hi i o Investment Outlookw
h xpod io i cio i dph, i c
h xpcd hpp.
Th o zo cii i d w hi wiig, d i io
w i wi po p o o i o og i o
co, which ji oh h ic i hi i.
Righ ow ci c h dcdd o cpi .
Th co iw o go gowh i i hoogo,
d oc idic o gowh. Eop h
p iqidi, d h i ppi h icd.
B hid od oc, w io d i
idig p go. Th wi icig c o io
wod.
Tod w h oh po h, i coi,
i x high. Th h og pop who ppod o c h pio o gowig o
od pop. ddiio, i o d o coi, w
d w chid who xpcd o ci i
gig popio ig o. Thi wi i q-
io o ig, d d how wo d copio wi
o. Th x wi co chg i od o c
pic co copio. W wi ocd o o
ogh dciio.
hi cio, qio wi id o cpi
pp, how ig wi i p d ocd, d how
iig dd wi iid. Th wi iig
i, wh podcio g i
di w. Mo pop pci h og go
o wo. Th i copii o di gio wi
chg. W wi oppoii i h x w .
Ad o o h wi xpcd.
Hans Peterson
CIO Private Banking
and Global Head o Investment Strategy
iduc
Times they are a changing
8/3/2019 SEB report: Hopeful start to the investor year
5/35
6 Investment OutlOOk - ebruary
S
exctatios*nxt 12 moths
rasoig *Fc h b u vw d d u cc wh c .tu isk
equitis 8% 18%
Neutral outlook in the short term, Positive in the long term. Low valuations in many countries, exceptthe US, which has continued to deliver positive surprises. Limited upside, since volatility is already low.
More stable balance sheets in various sectors, including banking. Many emerging markets ell sharply in
0 and are now considered relatively cheap. High, stable returns but aected by growth in the OECDcountries.
Fixd icom 7% 9%
While OECD governments have weakened nancially in recent years, companies have instead become stronger.This is the undamental reason why we arePositive towards corporate bonds and Negative towards govern-
ment bonds. Government bond yields are expected to rise slightly this year. Meanwhile yield gaps between
corporate and government bonds may shrink considerably/corporate bond prices may rise, as the market
realises that current pricing, especially o high yield bonds, refects an excessively pessimistic economic scenario.Risk appetite will also benet emerging market (EM) debt.
Hdg fuds 4% 5%Positive. The market climate is especially avourable towards CTAs and credit-oriented hedge unds. Our ocus
is on non-equity-related management and unds that replace government bonds rom a portolio standpoint.
ral stat 4% 5%
Neutral. Transparency is still low. Credit problems pose a risk, but the market is resilient. Strong demand
or properties in primary markets has squeezed yield requirements, but interesting cases o good returns
can be ound.
pivat quity 11% 25%
Neutral.Good growth and low valuations (large discounts) mean sizeable potential in the longer term,
given an improved market climate, but nancial uncertainty will generate worries in the short term.
Commoditis 6% 18%
Neutral/Positive. Increased risk appetite has lited most commodity prices in recent months. A sot land-
ing in China is the key to continued upturns or industrial metals. Normalised weather conditions will lead
to alling prices or agricultural products. Oil price levels will remain high.
Cucis 3% 4%
Neutral. Given a continued increase in risk appetite, EM currencies should benet rom interest rate di-
erentials and growth. China is likely to continue revaluing the yuan (renminbi) against the USD, though at a
slower pace. The USD will be stronger than the EUR, with its overhanging southern European debt crisis. Theyen is regarded as overvalued.
1 The orecast reers to the global stock market. 2 The orecast reers to a basket o investment grade and high yield.3 The orecast reers to a basket in which the energy, industrial metal, precious metal and agricultural commodities categories are equally weighted.4 The orecast reers to the alpha-generating capacity o a oreign exchange trading manager.
XpCD ik D U (X mO)
iOiCL ik D U
(FbUy , O JUy , )
Cg i OU XpCD U
Equities
Fixed incom e*
Hedge funds
Real estate
Private equity
Currencies
Commodities
0%
2%
4%
6%
8%
10%
12%
0% 5% 10% 15% 20% 25% 30%
Expected volatility
Expected
return
Hioic d o h oowig idic: Eqii = MSC AC Wod EUR. Fixd ico = JP Mog Go GB EUR Hdg. Hdg d = HFRX Go Hdg Fd USD.R = SEB PB R E EUR. Pi qi = LPX EUR. Coodii = DJ UBS Coodii TR EUR. Cci = BcHdg Cc Td USD.
-5%
0%
5%
10%
15%
20%
25%
2008-11
2009-02
2009-05
2009-08
2009-12
2010-02
2010-05
2010-09
2010-12
2011-02
2011-05
2011-09
2011-12
2012-02
Equities Fixed income* Hedge funds Real estate
Private equity Currencies Commodities
Fixed Income
Equities
Private equity
Commodities
Real estate
Hedge funds
Currencies
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
0% 5% 10% 15% 20% 25% 30%
Historical volatility
Historicalreturn
iOiCL COLiO
(FbUy , O JUy , )
Equities
Fixedincome
Hedgefunds
Realestate
Private
Equity
Commodities
Currencies
Equities 1.00
Fixed income -0.47 1.00
Hedge unds 0.58 -0.31 1.00
Real estate -0.13 0.0 -0.04 1.00
Private equity 0.85 -0.37 0.67 -0.14 1.00
Commodities 0.24 -0.18 0.68 -0.04 0.38 1.00
Currencies -0.18 0.20 0.13 -0.12 -0.06 0.03 1.00
8/3/2019 SEB report: Hopeful start to the investor year
6/35
7Investment OutlOOk - ebruary
S
Wig i mOD pOCiO
Wig i mOD gOW
Wig i mOD ggiv
OLLig -mO COLiO v. mCi WOLD
(U)
-80
-60
-40
-20
0
20
40
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Equities Fixed income Hedge funds Real estate
Private equity Commodities Currencies
pFOmC OF DiFF CL iC
R i i i Dc .
Hioic d o h oowig idic: Eqii = MSC AC Wod EUR. Fixd ico = JP MogGo GB EUR Hdg. Hdg d = HFRX Go Hdg Fd USD. R = SEB PB R E EUR. Pi
qi = LPX EUR. Coodii = DJ UBS Coodii TR EUR. Cci = BcHdg Cc Td
USD.
Soc:SEB
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8 2 00 9 2 01 0 2 01 1
Fixed income Hedge funds Real estate
Private equity Commodities Currencies
6%
0%
7.5%
0%
0%
20%
30.5%
36%
0% 10% 20% 30% 40%
Cash
Currencies
Commodities
Private equity
Real estate
Hedge funds
Fixed income
Equities
Previous Current
1.5%
2%
0%
0%
0%
17%
79.5%
0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
Cash
Currencies
Commodities
Private equity
Real estate
Hedge funds
Fixed income
Equities
Previous Current
10.5%
4%
4.5%
0%
0%
30%
34%
17%
0% 10% 20% 30% 40%
Cash
Currencies
Commodities
Private equity
Real estate
Hedge funds
Fixed income
Equities
Previous Current
8/3/2019 SEB report: Hopeful start to the investor year
7/35
8
mc u
Global economic risks have decreased...
...and the US economy in particular has
delivered upside surprises
But many worries remain, so it is not yet time
to stop being vigilant
Th wod cooic iio h iid hi wi.
C cio h dcd h i h ci
. Th o zo coi h hi p
owd g coodiio d dp igio. d-
diio, xpcd og cooic ig h -
pci poi i h Uid S, ig woi o
go cio. Th i jo i, how, o
xp i h o o dp cio i oh Eop,
diiihd i i high i p o h -
ci d d go ic d o
copii d d ow.
Hig pio hd c gi i, o i cio
o gowh i h ECD coi ow o cd.
A i, dp o zo cii i h igg h,
whi h poii poi i od i h US coo.
io wi d i p o h wod dig ,
h o ow coodi pic d ow o co ic-
. h gig (EM) ph, ow iio wi
op h w o i c. o poi ocooic dig d gowh h wi hod p i w.
U c d u c
Th US wi oid cio wid gi, hogh h
co i cd Eop po i d, igh
ci codiio d ow dig. Y h Eop
d cii wi c oc o o US co, d
coid d dgig i h US hohod co wi
o i gowh. Fd c poic oo i o
coci h xpcd hi , h hdwid wi
og x . W xpc GDP o ic . p c
i oh d . Upo wi i o .
p c i . Co iio i xpcd o ow
. p c hi . Thi op h w o h
Fd R od pchig pog h -
, po ocig o ogg-cd cii.
ll l d d h u zTh o zo coi c pi choic hd.
Addiio c ighig i cii-hi coi h i o
o xpio o G d h
Eop C B (ECB) wi i dpig h cii
d cig poiic io, h h c
io ig o iiio. So cocooic iic
h poidd pid pi, d h h igh
po i cooic poic. Th ECB h o -
ig p o h ig co. G d Fc h
idicd op o ow ipio o h B
, h ig ci . Th o ic
dg coo w o-idd go i
oh d Spi. Th i o dp o zo cio
h h dcd owh. W xpc o zo GDP o
hi h p c hi d h gow o
h . p c i .Olc wll bh wh
Sic h o zo i h Uid Kigdo o ipo
dig p, ig p c o xpo, oig d
co i h Biih coo. Y h igh po i i-
d w i cocio d ic. T ogh,
idico copi wih gig coo,
hi Lodo pic G wi poid gowh i
io co. W o GDP gowh o h . pc hi d . p c i . io wi
p o w ow h B o Egd p c g i
. Fh c od pch h i.
dc cu l uhl d wd
Vi owig xpo, ggig opii d gi wh
c, h Nodic cooi h g cd
o zo po. Now d Swd, xpo h
pci hd hi c h o h i
gi hi cci. B h o og doic d-
d, h Nowgi coo c hd h
h o i Nodic igho. W o Nodic GDP gowh
o o p c hi d p c i .
Stabilisation and some hope or growth
Investment OutlOOk - ebruary
8/3/2019 SEB report: Hopeful start to the investor year
8/35
9
J h dl
Jp cooic co i coiig, hogh od
pc. GDP gowh wi o h . p c i d
i o p c i . V xpio c i
d cocio h di Mch
iig dd. Th dg dci i xpcd o xcd
p c o GDP oh hi d x. Go d
wi gow o o p c o GDP x . E h
d o h wi p o id oc i h coo-
, o dio wi i dic. Aog wih h x
og , hi poi owd h o ig.
ll wh
Ecooic xpio h d i Ai gig (EM)
coi, h gio wi i gi o h wod
coo. W xpc h piig owdow o d hipig. Gowh wi h cc gi. Sog go
c d copi ci wi
h cooi ii. Low iio wi ow oo o
o i . So coi h d c
i , d o wi oow i .
Dpi o dcio, Chi GDP cid o h
xpcd i h oh q. Q-o-q, gowh c-
pdd p. A c ccio occ hi .
W o GDP gowh o o h . p c i d
p c i . io h dd igic i
c oh, d h cooic poic oc wi h hi
o cooig iio o ppoig gowh. Mo po-
ic h d d owig qi
o , d h o hi id hd. Th
o o o o xpio c .
di gowh d iio h o owd, giig h c-
o o ow i i . Th p
o ii , how, ic pic ic i
h high. Ui Chi, di h w go c
d h co c poic o i h coo.
W xpc GDP o ic i o h . p c hi
d p c i .
L c wll lw h , ccl
A GDP gowh o od . p c i Li
Aic, w o owdow o o . p c hi
. A h h i good chc o wd ccio
oh i h gio who d i i pc-ig coi
Agi, Bzi, Chi d Mxico. Li Aic iio
i ig od wi i d p -. p c oh hi
d x. Th Bzii c i pic i i
o coi chig dow i i i . Aid
o i c i io coi, Li Aic i
howig coid pic dg d d g
h ECD coi.
D cc u
E (icdig C) Eop cooi g oig
o i . Expo d cpi pdig ow
owig, copio wi hod p w i coi,
ic hohod pchig pow wi o ow i-
io. GDP gowh wi coi o w hi , h
p i . Ri d Pod wi cop wih h o
zo cii i w, h Bic coi d h Czch
Rpic wi g dc, whi Hg d Ui wi
og h hd hi coi. Th dic d,
og oh hig, o h iz o xpo d how dpd
o i h o zo h coi .
Th o dic, copii xpo d pio gg-
i dg-ighig, h Bic coi h ocd
c ic dp cio. h p ,doic dd h d ig o iii x-
po-di p. Th Bic cooi wi gow .-.
p c i , d i o x . Thi ig c
cco dci h g iid d hi co-
pi h od. Th h coi h o
gd o ii pic co d od .
ll wh
A g o p c, w xpc go
GDP (d pchig pow pii) o ic
. p c i d p c i . Wih gowh g-
o .- p c , h EM ph i i hd o
h ECD coi, which wi gow id .- p
c. W h id o gowh oc o h wod, h
EM ph d h ECD coi pwd copd wih
o No i.
Mco
Investment OutlOOk - ebruary
ky CUig CyCL i biC COUi
Brazil, key interest rate (SELIC)China, key interest rate (lending rate, 0-1 years)
India, key interest rate (repo rate)Russia, key interest rate (refi rate)
Source: Reuters EcoWin
2003 200 4 2005 200 6 2 007 2008 2 009 2010 2011
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
22.5
25.0
27.5
P
ercent
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
22.5
25.0
27.5
So ar the Brazilian and Russian central banks have lowered their key
interest rates in this cycle. It should not be too long beore the Peoples
Bank o China and the Reserve Bank o India ollow suit. What has paved
the way or a loosening o monetary policy in the BRIC countries is a
combination o lower growth and ading price and cost pressures. Lower
interest rates help sustain economic activity and make the BRIC countries
more attractive or global investors.
8/3/2019 SEB report: Hopeful start to the investor year
9/35
10 Investment OutlOOk - ebruary
mOD pOCiO
Thogho , Mod Pocio h xpod
o ow o h i idpd o cooic
d. Th ihiiig co o h pooio h
h iqidi iio i Eop. Dwidig codc
w , wih -high i co-
qc, iig oowig co o h PGS coi
(Pog, d, , Gc d Spi) d woi o
o cop gd icd iqidi i dig .
To d hi iio, h Eop C B (ECB) o-
d d i coiig o o iid h o
ow i ( p c) o . Thi cio h
w-cid, d iqidi i h cdd. A w od o
dig i o xpcd i F.
Th c o ipod iqidi i h ci i
high ii i Mod Pocio. Dig Dc-J
h pooio o o h . p c. c
o co ix oh o cho dggig. go
cocooic pic i g chgd, d o h
poiio i hi pooio.
W xpc iio o od p c i o ECD
coi. Mwhi go od hioic ow.
G - id h d p c ic
Sp . Sic go id co ow
zo, i i i ig o owd iig id
h h oppoi, d h poi o gig -
i coig o d o difc.
h xd ico -pooio, w h coi o h
p c i d, wih poi o g
i io o iig id. High id od c-
co o h p c o h -pooio, d j
ow p c coi o gd o, which c
dcid high id od, wih oig , which
o h co i h pci cop. ocio
o gig (EM) od i i ow p c.
Th hdg d -pooio, which oc o Mi-
Sg d Eqi M N, coi o c i-
i i h pooio. Sic No, w h id wih
Cdi Log/Sho g, who po cop-
oh o hdg d d xd ico pooio.
Th cc -pooio ( p c o Mod Pocio)
i poiiod ccodig o o h Ai
cci wi ppci gi h US do. Mo o
i i i Dc d J cd cci
o gi o o h i o d i. Th -
pooio o . p c dig h wo oh.
h who, w i h h Mod Pocio i w-
cd wihi i ow-i d. Th pi i i i
h iqidi iio, which dio i h
. Bic, d hod i coo gi, d
h h pooio wi co i h w w h hiwi. go d g i h , d h o-
w id wih o c ocio.
Those who run too ast may easily stumble
Liquidity support to the nancial system has put Modern Protection back on course, while risk
appetite has given Growth and Aggressive a push. These portolios remain positioned to benetrom better global economic conditions, while able to withstand most alternative scenarios.
17%
2%1.5%
79.5%
Cash
Currencies
Hedge fundsFixed income
pl
c:
md ip
8/3/2019 SEB report: Hopeful start to the investor year
10/35
11Investment OutlOOk - ebruary
mOD gOW
Sic w wo o Investment Outlooki id-No
, i h cod igic. Woi o
cio i Eop h o dd. d, h xpio
i h h h picd i g gowh i Eop, d
io h co id o ig goo. W wo
i co hid og ci poc: )
Aic co iic w h xpc-
io i Dc d ) h Eop C B (ECB)
od d coi o o chp h o (h
Log T Rcig pio, LTR) o i iid
o.
Th co idic h h US coo wi coi
o gow i w, o c i h
h o o h pc o pi h g o ow.Co codc w owh ow, pchig
g idic w poii owh ow h
xpcd, pi copio w w d o
iic gi w, o io w co. Th i
h icd i h US co d d o dow-
id h h pid pi.
Th cod co, which w iw idic qii
ig, h c dcd h iqidi i i h ig
. Gi dcd iqidi i, c oc gi -
gi o d o h i o o og- d
d c oi. Th ECB wi c o w LTR
od i F, po ig p h d
poi ipoig i ppi.
Ahogh iqidi i h dcd, h o zo coi
o c d go d d cdiii po-
. W wi o oio o og i o co,
jdgig o h pc o poiic cio o . W c h
o o wd -p o woi o h o zo
hi . A hi wiig, o xp, h poigh h d
owd Pog.
W h o d dic ocio w
c dig h p ix oh. Thi i pci cw do o i h h go ooo h chgd ch.
Mwhi h poiic o poc i Eop i ig
i. Sic Sp, h qii -pooio h
o ci id i Ai d h Nodic coi
h wh w o h gowh poi. Eqii
h ccod o od p c o h o pooio
hogho hi piod. Dc, w ocd go
d o h ppo o dcig c xpo
o Eop. A h chg, h qi -pooio i
owh o poiiod owd gowh h i h US
d Ai, wiho hig chgd h pooio o xpo-
o qii. Th oco o h qii -pooio iDc-J w p o p c, wih EM
h dig h w.
Th xd ico -pooio o o p c dig
h piod. Wihi i, w h coid o xpo o
high id od, wh w o h high i-djd
poi . Th id gp gi go od
o igic d Ag-Sp iqidi d
cdi i o, pci i h o zo, ic h
i h d i dciig d, which h d h
pooio. Dig J, h US do o g o w
gi EM cci, which g ph o o EM od
id i oc cci. Th w do o d o
cci -pooio, which o o . p c.
Coodii, which hd ogh , d i
. coodii -pooio o p c dig
Dc-J. Thi c, which icd hig
o og jic o idi d god, i gcd i h ho h d o h do, i h
og di diig oc dpdig o h co-
odi. , w o od p poi i o
i cio, hi c coi o diic-
io d iio pocio, cig og- ii i h
pooio. W pig o p c poiio.
Th hdg d -pooio i o p c o
Mod Gowh, wih oc o CTA g gi,
which d o hic od. Ahogh p
h gi h dc o o i h oppoi di-
cio copd o oc , h h h poi o
chg hi poiio wh d ii. Dig h o
c piod, w h o CTA g o i
h go p, o h oh hd h h i
o hp wh h go dow chciic
h pod o good dig . i c whh h
g wi o dig , w i
h o g cp o dpig hi gi i
h dig d chg.
Pooio co: Mod Pog
10.5%
34%
17%
4%4.5%
30%
Cash
Currencies
Commodities
Hedge funds
Fixed income
Equities
8/3/2019 SEB report: Hopeful start to the investor year
11/35
12 Investment OutlOOk - ebruary
Pooio co: Mod Pog
mOD ggiv
Ri ppi h i hp ic Sp, wih h VX
oii idx ig o o od o ow . W
idicio h h d owd -co coiow d wihi c dig h g o
. Mco iic, pci o h US, i o
h pid wih dig idico igig coid co-
oic xpio. cd i ppi, ow coio
w di c d owh o
cocooic pic h cd i o ci ic
w wo h Investment Outlooki id-No.
W h o d dic ocio w
c dig h p ix oh. Thi i pci c
w do o i h h go ooo h chgd ch.
Mwhi h poiic o poc i Eop i igi. Sic Sp, h qii -pooio i o
ci id i Ai d h Nodic coi h
wh w o h gowh poi d w
h h poiio ochd. Eqii h ccod
o od p c o h o pooio hogho hi
piod. J i Mod Gowh, i Dc w ocd
go d o h ppo o dcig c xpo-
o Eop. A h chg, h qi -pooio i
owh o poiiod owd gowh h i h US
d Ai, wiho hig chgd o xpo o qii.
Th oco o h qii -pooio i Dc-
J w p o p c, wih EM h
dig h w.
Th xd ico -pooio o . p c
dig h piod. W h coid o xpo o
high id od, wh w o h high i-djd
poi . Dig J, h US do o g o
w gi EM cci, which g ph o o EM
od id i oc cci (o p c).
Coodii, which hd ogh , d i
. coodii -pooio o p c dig
Dc-J. Thi c, which icd hig
o og jic o idi d god, i gcd i h ho h d o h do, i h
og di diig oc dpdig o h co-
odi. , w o od p poi i o
i cio, hi c coi o diic-
io d iio pocio, cig og- ii i h
pooio. W pig o p c poiio.
Th hdg d -pooio i o p c o
Mod Aggi, wih oc o CTA g -
gi, which d o hic od. Ahogh
p h gi h dc o o i h op-
poi dicio copd o oc , h h h po-i o chg hi poiio wh d ii. Dig
h o c piod, w h o CTA g o
i h go p, o h oh hd h
h i o hp wh h go dow
chciic h d o o good dig . i
c whh h g wi o dig
, w i h o g cp o dp-
ig hi gi i h dig d chg.
7.5%
6%
36%
30.5%
20%
Cash
Commodities
Hedge funds
Fixed income
Equities
8/3/2019 SEB report: Hopeful start to the investor year
12/35
13
h
There are many actors capable o invalidating
our base scenario
I growth is surprisingly ast, the main
beneiciaries will be cyclical shares,
commodities, EM debt and high yield bonds
I Europes sovereign debt crisis worsens, this
will especially impact Western and Eastern
European equities, bank shares and European
high yield
J p h hhod o oh d , pic o qi-
i d oh i cid pid. Aoh p w
h h VX oii idx o (-) ow h hi-
oic g cig diiihd ci i ci
d iig . E i h i o
o opii w h h wod coo w gd hi-
ig io high g. E i w chd
piig good cooic iic, pci i h US.
i h w
Th d ci h g ii. A
o , iii opii io o wihi wo
oh. Th i o w cig oci i h
Midd E d Noh Aic (MENA). A , h wg coc o dipio i oi podcio, d oi
pic od. Thi phd p wod iio, hig h
coo.
Th x hoc occd o Mch , wh Jp w hi
di. Th cooic coqc w p
dop i h Jp coo, w jo dipio i
dii o idi good o Jp o h ooi
id i h US d wh.
W ld ch h
Togh h cood h wod coo, which d-
cd p dig h cod d hid q. A
wh h ood i h ci wod w dc
i pi o hig, dic dioio occd
i Ag. Wh iggd i w h dowgdig o h US
oig cdi ig Sdd & Poo. Th w oiig coc h h US wod d p i cio d
h Chi coo i hd dig. To op i o, h
Eop oig d cii cd hp, wih Gc
i h pic.
c d d c h
Hio h how h wo i co dp ip-
io o : ) jo cooic owdow,
wih ccopig ic i cooic woi d o
high iio i h w o pid iig coodi pic
d h Jp di, d ) cig o-
ig d cii i Eop, p h c h io coi
wh i h wod w hi cdi ig dowgdd,
icdig h US.
B h d o , how, opii d gowig o cooic idico did pid pi
i h US, d i oh p o h wod. E
Surprises may be waiting around the corner
Investment OutlOOk - ebruary
iOy i pig iLF
Source: Reuters EcoWin
2005 2006 2007 2008 2009 2010 2011
Percent
0
10
20
30
40
50
60
70
80
90
Both early in 2011 and initially in 2012, the VIX volatility index
(see chart) was at historically low levels, which indicated a rather
calm and positive mood in nancial markets. Last year this calm
was interrupted ater a couple o months.
8/3/2019 SEB report: Hopeful start to the investor year
13/35
14
i , o pog w o d i gig h d
iio i Eop. T ogh, h co cd h
o iw ci i io.
b w h l uu
cio o gi wih iio i which
h wod coo h c iid d h i o go-
cio h cdd. Jdgig o hi wi -
xpcd poii co ig, h i o good poi
o gd ghig o h coo hi . Coid
-oo o poici i ii idi coi,
copd wih ow oig od id, poi i h
dicio. Gi hi cio, w i h o
io ci wi o ccodig o h o
pg .
B wh h i d oppoii h igh d o
, o wo, cooic cio? Ad how wod hi -
c h o io ci ?
lcd cu
Ahogh jo i i, h c cooic pic
o i h ECD coi cd, hig
hd c gi i . W i igig
p c poii o o cio, whi h wo -
i wih pid d dowid pi, pci
ow oh coidd o h p c poii.
No, h poiii w d p c,
pci.
Th i og i o co cp o iidig o
cio d chgig h ooo o i poii o
gi dicio, h oowig co po o
pci ipoc:
Ccic pi gd i oc
TheunfoldingoftheEuropeansovereigndebtcrisis
Areturnoftheinationordeationspectre
Monetaryandscalpolicymanagement
Geopoliticalevents
Unpredictableshocks,blackswans
Fd, h coo h i ow hh. L i
pc, i od i pii cc wih p h
o o - d dow h o o
o. Y h i oc o h coo hd o pdic.Qi o, h gowh i o p o h wod d-
d gi o cc o dc, wiho hig
ipo i h co io ppig o h c-
chgd.
B h coo i o o i pc. d i i odi-
i jcd o co ic o oh poii d
gi co.
d c cl w
A igic popoio o w doid h g-
i cooic c o ) high iio, which didhohod pchig pow d ) h Eop oig
d cii. Th w oc o gowh i wo ch-
. Th w pic dg-ighig d h cod
w gi ci cio, which od h
ood og hohod d i, wih h -
c o h coo .
A joi o oc ow pp o h g-
poi o pid pi i h US coo d h
g poi o dowid pi i h Eop
oig d cii. o i h oh co
wigh hi, oh h h pic
co h doid h ic d di pic o
h p w oh. A c Ag/Sp ,
how, h w g coc o poi US c-
io. i o o hioic o xpod
io h . B hi do o oic h
h co wi ipo dig dig .
pc xc ud l
High iio i h w o hp coodi pic ic-
doid . Thi , w dic cood-
i pic i, h hod igic c o
pic ic i oh h ECD coi d h EM ph.
Low iio hohod pchig pow d h
Th: Spi wiig od h co
Investment OutlOOk - ebruary
Source: Reuters EcoWin
2005 2006 2007 2008 2009 2010 2011
35.0
37.5
40.0
42.5
45.0
47.5
50.0
52.5
55.0
57.5
60.0
Index
COOmy i LDOm LF i pC
The textbook image o an economic cycle is usually a s i-
nus curve without dips, but reality seems quite dierent,
as illustrated by the jerkiness o the JP Morgan global
purchasing managers index. Behind this is the recurrent
existence o both positive and negative actors capable
o infuencing the economy.
8/3/2019 SEB report: Hopeful start to the investor year
14/35
15
pi copio. o p h w o i
c i ho p o h wod coo wh h i oo
o c h, i oh wod i i EM coi, h
iig h coo.
A c owdow i h iio , o diiio, i o
co o i cio o , h p -
how h d c oi h high
id xpcio o wh wi hpp o pic. Dig
d oo h cooic d ci cii o d
h h o , h w widpd coc o d-
io ( g dci i pic). Thi w d o hioi-
c xpic h howd h cooic ci wih ig
ci d pop pic oi oowd
og piod o dciig pic o good d ic w.
Thi coc did o po jid, how, d
h d o woi id hid o high iio,
d i d coodii d i
qii ig h US Fd R i pic.
Dig , idicio h pc o dio wi
i i co. M ECD coi did i h id
o h-hdd d cig, h popc
o oh ipoig cooic iio d high ci
pic wihi . Th pc o iio wi po
i i co oo, ic wg d co coi o
i d i h ECD coi. P o id podc-
io cpci copi d cio wi o
iio d o xpio.
cc lc u c
fci cooic poic o poid pi. Fo xp,
o o xd ico d ow h
Bzii i c dig . Th ECB iiqidi ppo o Eop i Dc w o
xpcd ih. Sic h o h cop
o Lh Boh c h o
ocd o dop coio o poic hod
(qii ig, i od pch) oc hi i-
wpo o o o o iio. B h
ipc o h w o poic oo o h coo,
ci d pic oio i o c.
Aoh oc o ci coc how ch coi
wih dg dci hod igh c poici o h o
hd ig i id hi w cooi d wid-pd oci d, o h oh hd, dd ig
d d d iio iiio.
Th qio i how o c do o c i h,
o h who, do o h h wod coo oo ch
pc phid pci h io Mo
Fd (MF) whi ig h ppo o d, h
ig i ow i w o hi
idd coi.
No o ow, d hi i wh h o cooic poici
i ECD coi i o pi d
i w. Sch pi o occ i h EM
ph, o xp i h o o xpcd pid i
c o od o, o igic o cio
o h i wpo h xpcd od.
h lcl wld lcl
Th gopoiic wod i pcd wih i d o h
g cpci o pi. oio xp i h oci
o i h MENA coi cd c w
i h gi o h c wh gi L Ni which og
hig oppd oii gi, diid pow d
dw poiic p. Th c chg o pow i Noh
Ko oh xp.
Dig io w d h W wod,
wih h US d i dig o, igh p c
p pci i woi o oi podcio d dii
d o i o xpi oi. Wh wi hpp o
h Ad gi i Si i o high o hi gopoiic
gd. E h o h ig o h poici o h
jo pow, cd i h Chi/Ri o o h UN
Sci Coci oc oio id Si.
Aog oh gopoiic co hi wi g
cio i o coi, which wi po h jo
ipc oid hi od w, o xp h cio
i Fc, Gc d h US.
Th: Spi wiig od h co
Investment OutlOOk - ebruary
piC D piC XpCiO OOiOULy
ULibL
Source: Reuters EcoWin
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-1
0
1
2
3
4
5
Percentchange,
12months
Consumer price fuctuations in the OECD countries have been
rather wide in recent years. As a result, expectations about which
way prices are headed have shited greatly. During 2008 infation
worries climbed, in 2009 the risk o defation was the big topic o
conversation. By autumn 2010 the danger o infation was again
ashionable.
8/3/2019 SEB report: Hopeful start to the investor year
15/35
8/3/2019 SEB report: Hopeful start to the investor year
16/35
17
h
A euro collapse would lead to deep recession
Capital market reaction would be more
dramatic than ater the Lehman Brothers crash
Portolio protection can prevent a sharp
decline in value
A h d cii i oh Eop wo d h cc
i h o pojc co dp, h xic o h
o h g o qiod. A cop o go i w
hi h co cod do h o, od
op dicio o hi h i d w. Ahogh o
i cio i h h o wi i ic d o co-i wi h coo cc, i i woh podig
h poi c o poi o cop. hi h
ic, w wi o pdic how di pic
c, w how io c poc h i h
o pojc p.
W uc h h Lh bh ch
B idicio, o cop wod d o ci
d cooic dow g i gid h wh h
Aic i Lh Boh chd i h
o . Th w o o pi wh
US hoii, hig d oh ci ii-
io ig o h i o i, cho o o Lh
Boh. F pd i wid og ci
p. Th ci id i i o, ic o o
wd o d p ig h o. Liqidi w hodd,
id o owig i oi hogh h ci chi.
Pdic, h wh o h coo o g o
q i d hohod w did cig.
Th o pojc i i cii od. Th jo -
io w coi, poiic d d o. poii-
ci p o h o hogh h cii hod i,
h i i h h cc wi o i i i c
o. Th coci oco, wih widig ipicio. oco o g
wod i h o cii-pgd coi dod h
o d cod o hi ow cci. B ch
cio wod c jo i i h ci . igh o d o ci, o h h Who
i x? A co h hd h o zo wod
o co ipo i copii, ic h o i
ow cc wod ow h h o, hi i
o oio o h o po. Thi co wod i
ocd o ip ogh o, d h iig o
zo coi wod h o p woig owd g
cooio d poiic d c io. Gi
hi oco, h o pi wod i
h i h i o pojc w diod.
A dciio o cop dio h cc io wod
xpcd d wod pood hoc h . Th
o pi wod ci, ic h i
ocig d i dc wod idi
d o oo cpi ow w o w coi d
o og o. Th ow wod c ci
dow h wod ipoi o coo. B i h
-p dciio w p c i h i, h
cooic coqc wod i dd.
Dioio o h o pojc d coio o w
xchg wod o po- xci,
pci ic i wod h o occ qic d po-
i ci o g ci ci. B wodpo cio id owd dig o
oh i d hohod, i h w wh h
i w. Th Lh Boh cop gh h i
idicio i. To oid ig o gi ig
, copi wod po id p ch d
hohod wod c o op hi w. A co-
iio o iqidi hog d pgig copo cpi
pdig d pi copio wod d o g-c
cooic pi. Th o o zo cod o oid
dp cio, d hi oo wod o h jo ipc
o h go coo.
h hu d cl
Wh, h, cod w xpc o h i hi igh
Protecting onesel against a euro collapse
Investment OutlOOk - ebruary
8/3/2019 SEB report: Hopeful start to the investor year
17/35
18
cio? G pig, ii d iqid
wod po wo i d ci. Eqii
d coodii pic i h wod og
h ig o. h oc , go o o ig h igg o. Th, o x-
p, h US oc g h ho o
h Nodic d EM coi i c o oc ch.
h coodii , i i ccic coodii
oi d idi h h g pic dci i
oc ch. Agic pic igic
ii o chg i h coo d wod h o
cd o h x. Pcio pic i
ici, hogh. God i o iwd h i-
, i c o x ci dipio
which o cop wod c i i o dowhh god cod i ig pd og.
Th od i o diid. g, h go-
od gh wh h coo ow,
whi copo od o . Th wo po
copo od i h high id g (id co-
pi wih ow cdiwohi). Th i i
gd g g , o o
io co wiig o i.
h oig xchg , h o iqid cci
g h wh i ppi i copico .
Th US do (USD), Jp (JPY) d Swi c (CHF)
gi god i od i, od h CHF i
pggd o h EUR. S, ccic ii cci ch
h Swdih o o Nowgi o, how,
ig ig wh i ppi d.
w d w c ul u cll?
w h i i h o cop occ
d h hi wod h dig ipc o ci
wh c w do o poc o?
w i o c pooio o h i-
i i od i. Thi pooio cco o ci
pcg o o o i cpi, wih h ig
id ccodig o o idiid i ppi. Aocio
io wod did how g h poii o
o cop i dd o .
od o idi i hodig o poci pooio
i gi cio, w h cho o oo c how
ci pod dig h cii. Thi d
o h cocio h w hod ow US do, Jp d Swi c o god. Th i po o h
diid pooio o h i od o iii
i. Wh c o cop wod c h, how
poiic d wod choo o c i d wh h
wod dico h co w co pdic d
h wod c poc.
A iio, i w c q wighd cio
pooio o h o-iod (USD, JPY, CHF d
god) d oo poc o Ag , o
F , , i o h whi h MSC AC Wod
dx o qii (i o) p c, o cio po-
oio o p c.
Investment OutlOOk - ebruary
60
80
100
120
08/08/01
08/08/15
08/08/29
08/09/12
08/09/26
08/10/10
08/10/24
08/11/07
08/11/21
08/12/05
08/12/19
09/01/02
09/01/16
09/01/30
09/02/13
09/02/27
Index
Scenario portfolio MSCI World AC, EUR
Og pFOmC FO CiO
pOFOLiO F Lm bO
COLLp
An equally weighted portolio consisting o US dollars,
Japanese yen, Swiss ranc and gold rose 26 per cent be-
tween August 1, 2008 and February 27, 2009, measured
in Swedish kronor. During the same period, the globalstock market ell 31 per cent.
Th: Pocig o gi o cop
Soc: R Ecowi
Lh Boh cop
8/3/2019 SEB report: Hopeful start to the investor year
18/35
19
L ow oo od pooio d w h
ocio. A p, pic ocio i p
c go qii, p c xd ico cii wih
owighig o copo od d p c -i i ( p c hdg d, p c co-
odii, p c pi qi, p c d
p c cci). Sch pooio o od p
c o i dig h o piod. w hd pocd
h pooio ocig p c o i cpi o h
o-iod cio pooio, o poc wod
id h - p c.
Wh d c c l?
Wih h hp o ocio o o cio pooio, w
h ccd i pig hp gi poc i
o od pooio. Wh, h, i h co o hi pocio?
i oh wod, how wod h cio pooio po i o poii ci?
A o poii ci hod o d o g i
ppi, which g pig hod c oh h
USD d h pic o god o . How, god h pod
og i c , oh dig ccic d
dc. Fo hi o, od i i difc o pdic
h dicio o god pic i o opiiic cio.
Th o h c h gh h coo wi
po o cci i diig wh god pic
hdd.
W wi p o i h co o hi pocio oo-
ig h o pooio i igic ci-
. h od dc o o i
w . L oo h poc o h od po-
oio o J o Dc , . A h w wi
c o h xci o, ocig p co h cio pooio d pig p c i h od
pooio. hi c, pocio do o o o
co , qi h co. Wh h od pooio
gid p c, h pocd pooio o . p c.
ig o o hi w h god pod piig
w (+ p c d i o) i h poii
ci w w dig . W c pc o whh
h pic o god wod ic og i opiiic
od, w hod cio o ig ch
pio.
poc hod h i , good w Mch d Dc , w wod
o pcg poi i ig h o
pooio pocio. pooio wod ic p
c, id o p c. A p, i i ci o o
i h w wi xpic oc i h o
w w i . B o d poid o how g
h co o h popod pocio igh coci .
So do i o p hi pocio io o pooio?
Th w i high idiid d i dpd o
wh i w wiig o io. w h og
i hoizo d h hogh o o cop do
o p o pig igh, w c po do wih-
o hi pocio. h iio i h oppoi, w hod
ci gi o x hogh o how w c chi i-
pocio gi h wo coci cio.
Investment OutlOOk - ebruary
pOFOLiO pOCiO C pv
p DCLi
70
80
90
100
110
01/08/2008
15/08/2008
29/08/2008
12/09/2008
26/09/2008
10/10/2008
24/10/2008
07/11/2008
21/11/2008
05/12/2008
19/12/2008
02/01/2009
16/01/2009
30/01/2009
13/02/2009
27/02/2009
Index
Model portfolio with protectionModel portfolio
The Lehman Brothers crash helped trigger a sharp decline or
the model portolio we have described. I, at the time, we had
chosen to protect this portolio with a 25 per cent allocation to
an equally weighted scenario portolio consisting o US dollars,
Japanese yen, Swiss rancs and gold, it would have prevented this
decline.
i OCk mk LLy, pOCiO my b OO
Xpiv
90
100
110
120
130
27/02/2009
27/03/2009
27/04/2009
27/05/2009
27/06/2009
27/07/2009
27/08/2009
27/09/2009
27/10/2009
27/11/2009
27/12/2009
Index
Model portfolio with protection Model portfolio
During the stock market rally rom March 1 to December 31,
2009, the model portolio climbed 26 per cent in value. I we
had allocated 25 per cent o our capital to the scenario portolio
during this period, the total portolio would instead have climbed
by only 12 per cent.
Th: Pocig o gi o cop
Soc: R Ecowi
Soc: R Ecowi
8/3/2019 SEB report: Hopeful start to the investor year
19/35
20
Stock markets soared early in 2012 a alse
start?
ECB is providing unlimited loans to European
banks
Western economies must balance budget
restraint and stimulus
diig ci o how o i hi cpi, w w
wighig gi cpi pio. M
h cd io h woid o hig i
US cooic gowh, h Eop d cii d poi
hd dig i Chi. W i c hio i i o -
p i, d w o c dicio iiig i qi.
Thi igh ig o ci o h , c
h c ho- i copd wih high ci, w
i cio owd qii c.
M h d o o poii o. Th
po o h o o h BRC coi, wih
di dig h w (+ p c -o-d) oowd
oh Bzi d Chi (+ d + p c, pci). Th
US o coiig i Dc d o i p
p c YTD, whi Eop, Jp d Ri h g-
gd, h coi howig poii po-
c gig o - p c YTD.
Wihi h o zo h i wid dicpc w
coi. G h did oid poc, wih
h F Soc Exchg p o p c YTD, whi
po-pgd Pog d Spi oh i gi -
io o h piod.
Scowi, h i o i h d i i-
o ig i io o, d
ci. So hi , h wo co (d h
od EoSoxx idx) h cid p c, whihioic di co i co d hh c
h d i gi poc i .
Th i c g-o-w w o poii di-
h h od o whi d ix o og-
gi (ch h idd o h W wod)
d o wig ig i ho- idico.
vlu: A iod i pio i oInvestment Outlook, c io i qi
i chp i hioic ppci. o oh pic/
ig (P/E) d pic/oo (P/BV) io, o qi
d w ow hioic g, wih oid
pid poi.
Pros and cons o the early rally
qu
Investment OutlOOk - ebruary
Positive Negative
Vio dd d c o
gowh
Low id oig qii B c h
Aw c /
poiici
Voii d ow
Copo c h Si idico oo high
Index P/E
2011
P/E
2012E*
P/E
10-yr
median
P/BV
2011
P/BV
2012E*
P/BV
10-yr
median
S&P . . . . . .
G . . . . . .
Swd . . . . . .
Fid . . . . . .
Now . . . . . .
D . . . . . .
All Nordic key ratios are based on aggregate gures (market cap)
in SEB Enskildas Nordic equities universe. * = estimate.
8/3/2019 SEB report: Hopeful start to the investor year
20/35
21
Lw ld f qu: ci dcp c-
ig o , pig id o wh d o (d o
o x i i) o o h o i- i o
h, US go od, i i i cogig i-
o o o o i i ig o g , h
icig hi xpo o qii.
Cl d lc h gd od h
cooic iio i Eop high p o hi gd. Th
ow ddicig i d oc o o o c o-
io h wi poiic ii d cooic gowh
o hi gio. Aw o h gi o h cii d
i poi ipicio high og Eop d.
Thi i o o h hig wi od i od
, coi d io go, i i
i o h Eop d ci ddig h
i hd.
C lc h , o ci x, i hp h dig h cii. Fo US o-ci co-
po, ch pcg o o (c p
c) i i high ic h , hig ood
o p c dig h . Woh oig, how-
, i h h io o o d o woh h o
o j ow p c, whi pig p c i h
h o h ci cii.
idd d lc wh: o h co co-
iig o gi iw o qii i h i cc-
io o oig d og W io. No o
do h gid o c d qi ic dgdicipi o ipo, i p idiid
io o cig co-ccic i od o i
cooic gowh. Th iio i dic o
Eop io, d hogh J od cio w
ccodig o p, h i i i d o oig d
oo. Ao p c o d h i
d dig h o oh. T- id i
d Spi c dig . d . p c
pci, whi Pog - id o o . o
. p c i h wo w o J.
u o i good hp d h -
poi id o h Eop C B hogh i
Log T Rcig pio (LTR) pog. Wihi
LTR, Eop c ci h dig hogh
h ECB p c i . Dd o h
ch o ECB dig i Dc chd EUR
iio, g xcdig i. Th Fch pi ii
dcd h i w ow h poiii o o ECB dig o pop p hi go (i.. oig
d). Th po i o co h hi dig i o d-
diio oc o cpi, h i o diio
dig o h pio oc. US ci iiio,
Ai go d oig wh d h co
w o dig o Eop whi h d cii p-
i. Th ipicio h hi ci i i g
ig ppd i h ow c h, h h
ig - o h copo co o i gowh.
vll, d h VX idx (ipid oii o S&P
idx opio) i o d o h idx. Th
VX i o io i d h hioic
dd w d h high . Hig pid d-
ig qi c, h idx h
d pc d w i F.
Eqii
Investment OutlOOk - ebruary
US 10-year Treasuries, USD Source: Reuters EcoWin
1950 1960 1970 1980 1990 2000 2010
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Per
cent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
VIX volatility indexSource: Reuters EcoWin
1992 1995 1998 2001 2004 2007 2010
0
10
20
30
40
50
60
70
80
90
Per
cent
0
10
20
30
40
50
60
70
80
90
U gOvm bOD yiLD iOiCLLy LOW
LvL
The extremely low yield oered by the US Treasury securities
market is encouraging investors to take on more risk in their
search or returns. One way they do this is by increasing their
exposure to equities.
viX iDiC pLy ig ik ppi
Since last years stock market turbulence, risk appetite has
increased in the market. This is refected, not least, by the decline
we have seen in the VIX volatility index, which dropped rom last
autumns peak o 48 to around 18 in early February.
8/3/2019 SEB report: Hopeful start to the investor year
21/35
22
Thi i o co idicio h io od
h oh go, w h h ch oo
ow d h io oo . A h ch o h
pcdig pg idic, h c h oo o idicio o i ig poi.
dc hh: h c o ow
i h VX idx, h B/B io og US io
pid dic dig J. o c -
ig o poii o d hopig o oio i
Eop, coid poii pi i h US coo d
o dig i Chi. W h c io, i hioic
ppci, picig i oo poii cio.
Wighig ogh h po d co, w d p cocdig
h codiio o o h oc h
c o h o c oh, o o hi pid i
d picd i od. Th oc h good
poi o d w o zo, io hod p-pd o p id.
Ou c dl cu llc
Th c iio i h o zo h cd owh.
h co id h d cii h h g o h
ipc o pic. Fo xp, iig h pic
i c oh c i cid o piig
og cooic gowh i oh h US d Chi. A c-
o Investment Outlook, w pig o
oc od o ocio w di coi
d gio. Wih h o zo cii o og ohdow-
ig oh co, h od gio
ocio gid. A w, how, i i ipo o ph-
i h od i w dic ipicio o i.
Th od hod gdd oo o xpi how w
io d wh w i wi di h.
No o ch h chgd i o iw o h copdo h i o Investment Outlook(No , ).
W h i h h co o h h po-
i o di h oc o co ppci.
Th co GDP gowh, o poic, c poic,
ci ii, io d cc. Ech co i -
igd co d o i poii o gi coiio
o h oc i ch pci co. Th co
o - o +.
Ch d h dc ll
c gi, Chi co high i o od. M o
Chi i o pp o Ai i g. Th giohigh gowh i o c. B i wh go cooic
gowh i ow i hioic d, io wi po
icig oic o h wid gowh gp piig w
Ai d h Dopd M (DM) coi.
A coqc o ig ood pic, pio high i-
io p i Ai h d, which hod oc
i w. Hohod pchig pow i i-
ig, pci ic ood co g cco o g
popoio o o Ai hohod copio. Low i-
io op h w o o xpio o poici.
Whi i i h W h d pd co
o zo, h i wpo i odd i h E.
cooic cii dwid o did x, Chi c
o x oo c c. Looig h ci
ii co, h co g op co. d p
i h wod g d i go d i ow. Looig
hd, h o idicio h Ai cci
wi ppci ( h Cci cio).
Th Nodic coi d Ri o po w i o
od, d h iiii wih Ai d Chi o
. i difc o cop i o gowh ,
h ci hh o h Nodic d Ri i good d
h i oo o dop o xpio c d opoici. Aoh iii i h oc i h co-
i o pod w dig . o iw, h
oo dd h ig. o
o hi w poc i h io i iw h EM
ph d h Nodic coi piph , io
which h c o p o i codiio
o. B i , h oc h d
coc, hogh h i i i pi o oc
h hod gd hi.
uh u wh h
Th o zo h cod i oo ig i o od.
Th gio poii co c i oc
chp o io dpoi d c o
Eqii
Investment OutlOOk - ebruary
0
1
2
3
4
5
2007 2008 2009 2010 2011 2012
Bull/Bear ratio 10-yr average
my ivO XpCig COiUD
OCk mk LLy
The percentage o investors with a avourable market view
climbed sharply early in 2012. This indicates higher expectations,
with more and more market players pricing in a ar more positive
scenario ahead.
Soc: Boog
8/3/2019 SEB report: Hopeful start to the investor year
22/35
23
poic c gdd high xpio. Th ECB -
c ppid o wih EUR iio,
ciiig hi cig d d ig h o
wi o h i o iqidi hog i h ig .
B ohwi, o o hig i wighig dow h o
zo. Th c coiig o go i h wog dicio
o oh Eop cooi, d w icig o o
oc h h o zo i oig owd id c-
io. Th igg oc o ci, how, i h
poiic c. Ahogh ipo p h
owd g cooio, h i jo -
io w io, poiic d d o. S
oc i h gio w od hp i
poiic dop ig pid pi, w do o
i hi i i woh ig. Mwhi codiio
g w oh d oh Eop. G
cooic ii, o xp, h pid pi i
h p oh, d h o w xchg i ig
h co ipo xpo co. Expo o G
copi h h h poi o o i-
.
Eqii
Investment OutlOOk - ebruary
COUNTRY/
REGION
Growth Monetary
policy
Fiscal policy Financial
stability
Valuations Currency Total
Ch
u 9
dc 9
bzl
id -
U - -
J - -
u z - -
OU giOL m mODL
In our stock market model or country allocation, we select those actors that we believe will set the
tone, based on the market climate we see beore us. Each actor is assigned a score based on its posi-
tive or negative contribution to the stock market in each respective country or region. The scores vary
rom -3 to +3. This time around, we believe that the ollowing actors can generate dierent potentialor various stock markets: GDP growth, monetary policy, scal policy, nancial stability, valuations and
currency.
8/3/2019 SEB report: Hopeful start to the investor year
23/35
24
Companies fnancially healthier thangovernments
While governments have become
inancially weaker, companies have instead
gained strength
...which is the basic reason why corporate
bonds are more attractive than sovereign
bonds
Pricing o high yield bonds also relects an
overly pessimistic economic scenario
Go od h diio gdd
xd ico i, oowd ogg d copo-
od i cdig od o i, i c hh h dic o o hi iw.
g wh h US ogg cig i
, cd i h pci o o ogg
iiio opig i h -pi co (pciiig
i o o cooic w hohod). h w o
h pci, h w hp dci i h pic
o ogg-cd cii, oowd h o
go ci d cooic cii i iig o. S
Eop coi w whi hi ci,
which d h ow o ogg d o hi
id o h Aic.
Thi coid wih o oig d cii c-
d i Eop, dig cdi ig gci o dowgd
h cii id go, i o
c o j . Fo good o, h oig od
o coi d o o x hi ogg
od h h o ch o hi pio
xd ico i. Wh h US o i AAA cdi
ig o Sdd & Poo i Ag , hi co-
id o h d gi ood dig Ag
d Sp. Tod o go i h wod
o hi op cdi ig. Th icd G, h Uid
Kigdo, Swizd, Now, Swd, Hog Kog d Chi.
Th ooo o go c do o good.
Thi i pci o h io po coi o
Eop, o h US d Jp. Th coi c o ogh pdig cc, w x d i-
c, i od o dc hi g dg dci d ow
h gowh o hi ccd d. P di, c
poic i o ECD coi wi h ighig i
o gd o h piig cooic ph.
oh wod, h i pcic o oo i coi
o diio Ki iiio poic ig c i-
.
l cl
Ecooic poic poiii o hpig i h co-
o d h ci co i h ig hi o c. Th US Fd R (Fd) d o od
qic giig o pp zo i poic, w
chig i qii ig (QE) : p-
ch o go d ogg-cd od.
Th Fd h o d o coici o
poic wpo. Th o i i poic -
ig i J w poi h h piig . p c
i wod po pp i . o
jdg, h Fd o ch hid od o qi-
i ig (QE) hi .
Li h Fd, h B o Jp h cid o g p-
ch o cii (id o go cii, o
copo od d qii). Th Jp i
i g xpcd o i . p c o
. Th B o Egd i wi pd
. p c o og i o co, d h ciig o BoE
od pch w id i F o GPB i-
io o GBP iio.
h Cb ul
Ui i oh jo cog, h Eop C B
(ECB) id i i wo p o . p c dig
pig d . Dig h , i dco d c h o p c gi. Th i
i o i h i . Mwhi h
Fxd c
Investment OutlOOk - ebruary
8/3/2019 SEB report: Hopeful start to the investor year
24/35
25
Fixd ico
ECB i coiig o pp Eop wih iid
iqidi d i ig h od o o zo po co-
i i h cod .
Dig , go od id i ch co coi
h US d h UK wi cd codico oc.
Lg cig d d popc o igh i p-
pi poi owd high id, whi ch ow iio
d c od pch g i o
o ow id. oo-i oc i owh iig
id o go od i h co o h .
Coc wih h ci dioio o go-
i h p , h iio o copi
wodwid d h o h od h i h ipod
i io pc.
Copo po did, og oh hig,
dd o h good d ic h copi podc,
h xp chgd o hi ico d how -
ci hi podcio i.
Th wod coo i idd ow i p, i i p-
dicd h hi wi oowd gd
high gowh d dd. Wg d i h g
xp i copi i icig ow,
d o w o . Togh wih coid i
good podcii (podcio p ho wod), hi wi
i io ic i xp p i podcd,
which i icid h o ipo co hid i-
io i h ECD coi. ddiio, h hp p i
coodi pic i d i h
oowd ig pic, owig podcio co o co-
pi o h wod.
p h l c
Mwhi h ci hh o copi h gh-
d i diio. Th po o ch podc
od h chd o cod i o pc od
h go. h US, copo po (ig p h o
copi i h S&P qii idx) h gow
g o o . p c o h p ,
wic h co GDP gowh. A h
o US io ico, h h h icd o od p c h o h ii o o h p
c i . B idicio, hi d wi coi dig
h x .
Copo c h h o co og d
o . D h d copi h x-
dd h ii o hi od o, owig h i o
d d pci. ddiio, copo i
h id idig p g o iqid .
Thi h gi copi i c o xpcd d
d chg i hi i io. A co-
qc, h dg o ig iqidi cii h dcd.
Aog copi h i high-id od, h -
pc g i J w . p c, copd o
. p c i d . p c i No
(h p dig h ci d cooic cii). Ahogh
Mood cdi gc pdic h h pc wi
ci o . p c i J , hi i w ow h
g ic ( p c).
C cll h
To i, od copi o cooic d
ci og h go. c,
copi o o ci o h ogg
d. Thi i h d o wh copo od
pci high id ci o io.
ddiio, h picig i h high id od g i-
dic h h wod coo wi oo d p i jo
cio, which i o o . Gi h po-
pc o igh cooic poc d gd
i i i ppi i ci , h wid id gp
w copo d go od hod hi
ig i pic ic o copo od.
Investment OutlOOk - ebruary
10-year government bond yield, KRW Spot USD/KRWSource: Reuters EcoWin
Jul2009Oc t Ja n
2010Apr Jul Oct Jan
2011Apr Jul Oct Jan
2012
Percent
3.50
3.75
4.00
4.25
4.50
4.75
5.00
5.25
5.50
5.75
USD/KRW
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
m Db WLL pLCD iF ik ppi i
When the mood improves in nancial markets and the
desire to choose riskier investments increases, emerging
market debt is well positioned. For an investor in the
OECD countries, the return on such investments comes
primarily rom rising exchange rates or EM currencies,
but also to some extent rom price gains on EM bonds.
The adjacent chart shows data rom South Korea. Dur-
ing the third quarter o 2010 and the second quarter o
2011, or example, the Korean won rose at the same timeas the bond yield ell/bond price rose.
8/3/2019 SEB report: Hopeful start to the investor year
25/35
26
Liquidity support to banks improves the risk
environment...
...and potential or Relative Value
Macro and Trading still the best diversication
Sic h i o Investment Outlook(pihd
No , ), hdg d poc h id
gi. A h i o piio, h i o i h o
zo cii. Php woh ddig o coc d
o h cooic owdow i Chi d dowgdig o cd-
i ig o d io o zo coi. Ui
h Investment Outlook, w c o h cocooic
iic o h US h poii o i ppi. Th
HFRX Go Hdg Fd dx o . p c dig hoh q o . Thi w igic h i h
hid q, wh h idx o . p c. Fo
who, h dci w . p c.
A jo gi howd gi i , wih
Eqi Hdg poig h o wo wih dow-
o . p c. Mco d CTA gi howd i
gh oig o . p c dig h piod. A
i pio i o Investment Outlook, w chooig o
diid h hdg d io o i gi:
EquityLong/Short
RelativeValue
EventDrivenandDistressed
MacroandTrading
qu L/h
Ahogh oc g o owh dig
h h oh o , g ci pid.
Voii w h high. Codico d coig -
o cooic popc d oio o h o
zo po did o hp c ii. h co-
o, h US co cid h ppo o co
d h poidd pid pi. Mg coq
dcd hi o xpo d h did o ih
o h oc o poii poc dig
h q. HFRX Eqi Hdg o . p c i h oh
q o , whi HFRX M N o . p c.
Fo h , hi g w -. p c d -.p c, pci.
Th coid d cii d xpcio o poo co-
po po i o h coid gi ipc
dig h q o . Th poii o cio
i h o zo h icd, d ppo o hi iw i
ii i pic, which hod idic h p
h po d dicod o h gi.
Wh Eop chi g ci o oio
o i woi, w i o o o codiio, i
which d co c gi dcii, hi
i. Exc o, w wi i cio owd
Eqi L/S dig h x w q. M N -
gi i high o o i.
l vlu
Fixd ico gi g coid o g -
dig h q o , hogh o owh
x h i h hid q. Th pio po-
igh o go cii o o god
dig h co i , wh oh h i gd
d high id o i. Liqidi dio-
d owh owd -d, d h w h -
dc og g o p hod igh ho
poiio i h . Thi h cod o o h p ih.
Th cocooic i o o zo -p d
owh i Dc wh h ECB ocd iqid-
i ppo o i (hoic) iid o p
c i. A hi go i coo cpio,
p o h d ppciig h poii
ipc o h o i h gi ic o
zo cii. Scc od i i Eop o
coi i J o coi o o o poi-
i iw o xd ico . Th d i d od
Gc i o o, how, d h jo
ipc o h i h w.
Europe headache and hope or managers
d ud
Investment OutlOOk - ebruary
8/3/2019 SEB report: Hopeful start to the investor year
26/35
27
Mg i cic d gi, h i
oppoii good, pci o high id copo
od, which h o p p wih h od p. Th
po good ig oppoii h d h, ohi Eop d wh i h wod. h who, h i-
o oo owh o cd, d w poii
owd Ri V dig h x q.
D d Dd
E Di gi cod d, o-
o hid q, d i hogh h oh q wih
poii poc. HFRX E Di o . p c
dig Q, whi HFRX Did . p c dig h
piod.
Spd h owd g d cqiiio p-pochd hi coig d w jo coiio o h
poii d. M&A cii dcid igic dig h
cod h o w owh high h i .
Acii d d o h owh ipod
ci, oii d coid cooic ci
ocd h o ii ic i coo. Did -
gi hd ixd q i o poc. co
w poii oh. Wh poiic d d o i
h i o h d cii, pic o i gd.
Mg hd hdgd g poio o hi hodig, which
copd i w wih h c, oh co-
qc w h og hodig did o p p w dig
h p ph. Dc w igic c oh,
wih g dic w g.
Th i xpcio o high cooidio cii i
o co, d o xpcio h ci ch-h
p wi o gic cqiiio. Sch
io i o poii o E Di gi,
h whi high dpd o h ci
o o hh. Difc piod h ocd
g o dc hi gig d c c hi poi-
io. W i i h h i good poi i
h g, h i i owh oo o ic
xpo.
mc d d
Th q o w coiio o h pii
h hid q, h i, wih jo dic w
io g. c, h pci g
iw o Eop w cci o poc. Th i o
h h wod w dig h hid q w -
od gi i No. A , i w -
o c c poiio owd -d, which d i
h od o dig Dc.
Viwd gop, CTA d Sic Mco dd h
gi. h gi, i h w jo di-
c w idiid g, dpdig o od
p d ocio. Td-oowig od i xd
ico w h po, d g wih g
h o hi o ocio i xd ico did ic. Thowih o xpo o d od, w ho
wih ci dig i coodii, pod gi
dig . Cc gi hd copicd d
o cc iio h Swi d Jp c
, which coid i h oh q w.
Mg i Eop h o ipo o wch
i h . Ahogh h iqidi iio h i-
pod, wih h hp o h ECB iid h o,
h c i h h x g go
o h wi d d wi d o cd i h
q o . Th oi odig Gc d co-
id gopoiic io i h Midd E hod c
iig oppoii o g, h wi d h
ii o c qic o i od o cc.
h i o Investment Outlook, w highighd how
CTA d Sic Mco oo o pooio dii-
cio. Th gi xpcd o po w wh
oh c hig difc. Thi i o dig
. Mg h icd hi xpo o d-
oowig od, which h d o g hodig o xd
ico cii. Coid wih hi gi poiio
i h o, hi gi h d h di chc-
iic h dii o pooio xpod o ocoio c. Mco d Tdig i o
choic og hdg d gi i h .
Investment OutlOOk - ebruary
Hdg d
STRATEGY INDEX PERFORMANCE % (USD)
Jan 2012 Q4 2011 2010
gll d FX gll d Fud . 0.48 -. 5.19
qu d FX qu d . -. 19.08 8.92
l vlu FX l vlu . 0.10 4.00 7.65
D FX D . 0.56 4.90 1.98
mc FX mc . 1.96 4.88 1.73
8/3/2019 SEB report: Hopeful start to the investor year
27/35
28 Investment OutlOOk - ebruary
Greater international interest in European
properties
Strained valuations in many primary markets
create attractive opportunities elsewhere
o i ci i i , wh ig
io , o d poi o h i o co-
oic d. o d i ci,
i h o w h i ic , h i o-
c id d p ig o whh io hod
i o i o i. ch ci, i i h
h h coio w di i co
og, which i i o difc o io oci dg o h diicio qii o
di c.
l d dc
Wh h oc dig h o , h
coodii d pi qi copi o p-
od w. Vio o idic i,
i id pop copi d i
(RET), chgd i i wih h go oc .
h d coid o h
h w o coo i w h go o dic
pop i.
Th w o i ochd h
c, d h gi ci ci chd
hi i h hid q. Bc o igh o qi,
dd i pi d pci o oph pop-
i d h xp o ii cod .
R d oo og o co, which w cd i
owh ow cii. Thi, i , d o ow xpc-
io o h oh q.
gw ll u
D idic h h oh q o d o
coid h xpcd. Spiig, h iggic i cii w i h coci pop i
Eop, wh cio o o pid d o g
iio i i h gio. Thi i ocd pi-
i o G, Fch, Nodic d E Eop pop-
i, whi oig io i i oh Eoppopi .
Ai, h o o coci pop cio
h dig h oh q o . Thi dci i ci-
i w o, how, icd o d, which od
cco o o p c o h o i h gio.
Ahogh o cii co dig , h c -
i h o hioic ppci h gio coi
o h high cii .
Acii i h US ,
ghd dig h oh o . h co-ci , cii w chgd, whi idi
w og ho h ghd. Looig
who, h US pod o o cii
dpoi.
Real estate market is still resilient
l
b XpCD Civiy DUig Q
0
10
20
30
40
50
60
70
80
90
100
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
Americas EMEA Asia Pacific
USDb
illion
The largest increase in activity in the direct commercial real
estate market occurred in Europe (part o EMEA), where transac-
tion volume rose rapidly due to increased international interest
in the less cris is-hit countries in the region. However, activity in
southern Europe is weighed down by the overhanging debt crisis
in the region.
Soc: Jo Lg L
8/3/2019 SEB report: Hopeful start to the investor year
28/35
29
l ld ll lc
Gogphic, id qi id g -
chgd i , xcp o piph coi
i Eop, wh h o. M p h id hiid qi i cii-hi Eop coi co-
qc o h oig i i h gio. h who, how-
, h o i id c i
ii i h ci w
xpicd dig h cod h o .
Fo o i, w h o dig d i di
g. Whi id qi i pi
d o oph popi h igic, id -
qi i ii cod h i. L i h
hid q o , how, h w ig o hi w
o h ow-i g o owh high i-ig dc h w o pp dig h oh q.
Yid h g i ig d (d o iig
pic o xiig popi) ic h pig o ,
hig pd i h w o h ci cii. Copd o
h piig o h cii o o i , h
i h oo o co, hogh h i w
ow xpicig i difc o ji dci o ho
. Th ci ii, which
h w wi d o coid ghig o h c-
ocooic ci (ch w h i h US dig -
c oh). Eop poiic d d oio
o h piig d po, ch g d o
pd p o i i i o w c
o o od, i ci. Wh, o h i
hi occ, h id qi i h
coi hi jo owd .
idc l h l qu
dic i h how i
poc dig h p ix oh, h pic h
o di o h idic (i - cop h d RET). Sic Ag , h RET
h copid h poc o h oc -
. o dig h p ix oh h o
ii h h di coio wih h wod oc
(MSC A Co Wod dx i oc cci) h c
od o p c. oh wod, o di i h
RET h od i h dicio h oc
i o o c. Dig hi piod, h
o idic, p o . p c. Fo pooio
dpoi, hi i hig di phoo,
ic h oppoi o dg o h diic-
io qii o di i o o iid.io h io o wh h dic d h
idic poig o di,
o o h dcii co i h iqidi pc o io
p o i.
wh c wd l
Sic , w h o o ood o h id-
i o h . A h g ci
h ipod i c oh, pc h o co
owh . Ahogh h pic i o i c,
p o i h io i pi
i id. A coqc o hi, o
ci i oppoii iig wh. W
icig o o iw o i-
owh o opiiic od h h
oh go.
R
Investment OutlOOk - ebruary
The world, EPRA/NAREIT, Index (SEK) [perf %]
The world, MSCI All Countries Index, (SEK) [perf %] Source: Reuters EcoWin
Aug
2011
Sep Okt Nov Dec Jan
2012
-15.0
-12.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
Percent
-15.0
-12.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
iDiC L ivm
pFOmig Lik QUii
Since August 2011, the REIT market has nearly copied
the perormance o the stock market. From a portolio
standpoint, this is anything but a desirable phenom-
enon, since the opportunity to take advantage o the
diversication qualities o dierent assets is more or lesseliminated.
8/3/2019 SEB report: Hopeful start to the investor year
29/35
30
Continued nancial instability is causing listed
PE company market prices to move in tandem
with bank shares
...even though PE companies have stronger
nances, lower gearing and more stable prots
than beore the crisis...
...which, together with low valuations (large
discounts), indicates signicant potential ahead
c oh w h iiio i h wod
ci d good poc o ii
c. A gc, id pi qi (PE) copi o xcpio h h cid o ch h
od oc ic ooig o i co .
No, how, h igic h h h oc
i h pcdig dow ph. A i, h -
pic poc o PE copi i howig g ii-
i o h ci co, doid . Vio
i cii , wih dico o (NAV)
o - p c o id PE copi. o poii
cio, pi qi wi h og h po-
wi.
o opiio, od io o PE copi h cio. Th i w w i h icii o c
i h pig o h wod coo w i
dp cio whi high gd PE copi,
wih hi g pooio o copi ogh p -
io i h pcdig , d .
Tod, i o iw, h iio i di, ciig h
h i wog qi ig h d o poo.
Ad idd, h g i o o wh PE cop-
i hod dd wih g dico h . Aog
h :
Theriskofanewdeeprecession
Theriskofanancialmeltdown
Lowerreturnduetolowergrowth
Lowerreturnonequitygivenlowerleveraging
Disappointedinvestorsleavingtheassetclass(ightfrom
i)
L co xi h g, d hi c:
w d c wod oio h h hodig o
PE copi. cio o dciig NAV, h o
pooio copi qic, whi ow gowh ji
ow po ip NAV wi qic i ch cio.
B hi cio i o o i cio. i o ipo-
o o h pooio copi g i
hp h dig h - ch, wh o h
hd ogh dig gig cooic oo h
copi h cid i o o wo ic h.
fcl ldw, o xp o iggd o
cop, co d o. h ho , hi wod
d h ow o h PE co pci o i,
i dcd i ppi. Ui h ci cii, how-
, h co ci ii i good od. Th dg
o gig i g ow d h dio o d ig-
ic og, wih good diiio o ii.
h x w , o cio o h copi
d d. Thi o ci gh i o good h
h copi c wihd i og piod o
ci , gh ch wod po o h
jo ipc o go gowh. ch cio, PE wod
cd, o ci o h oh c-
o. How, w wod po igic ogh
cig iio hd, gi go ci po.
Mo difc d/o o xpi cig oio
hod o ji high dico o NAV, -
ig q o h oh hd, h ow i h
wod po p o hi cio wod h -
ci co g.
Mo o xpc h wh wll lw o
io h . Thi dc h poi o
g po ic i pooio copi d o ji
ggi io. B i i , copd oh od oc , PE copi hod id
o hi. A og h i gowh, ci owhip
p qu
Investment OutlOOk - ebruary
Attractive purchase option on stabilisation
8/3/2019 SEB report: Hopeful start to the investor year
30/35
31
gd, coid wih high gig wh oowig,
wod cp o gig po gowh.
Th c h PE copi od high gdh dig h p o h Lh Boh ch
h poi u qu wll lw.
Thi ji owh ow io. h oh
hd, i ipi icd ci ii d ow i,
which p o hi c.
Fi, h i h io wll cll d h
cl ow dd i . So
p, ch Eop , i h poc o
widig dow hi PE poiio, d pi
qi h pio ch, d o i -
w PE d od good iow.
T ogh, h h g i o o ow
io d high dico h h hioic g.
B dico o NAV gig - p c icdig
copi wih good cdi picd h
hi xggd. W i h c-
io idic chd , d w o
h . Th co i i igic hp h -
o h pio cii. Th i g i o o h
iio ig h io idic :
Asignicantlylowerproportionofportfoliocompanies
ogh h p (-)Generallyhigheroperatingmargins
Highernancialresiliencevialongerdebtmaturities
Lowerdebt
W i h h do o ppci h
chg h h occd i hi co ic h pio
ch d i h wog pig ogh PE copi
wih ci i hi io. Th cci dic
h PE copi od, i , o dic
ipcd ci ci, g d wi-dow c. A h
i, h h ch g oppoii o g
ddd i hi hodig i ci owhip.
iio o hi occio ig id owd PE
copi i h i h cod h o , Apx P,
jo Eop PE cop, did p c o i
pooio o copi pic o p c high h
pod NAV. Mwhi h dico o pod NAV (o
icdig h did copi) icd o o
p c. Sic h d qi o h iig poo-
io copi i coidd h ho o h did
copi, od io i ho o .
Th ow io o ip oo, ic h op h
w o io p o -gig cio. L
oh g PE cop, SVG Cpi, ocd
pog o pch i ow h. A h i, i
dico o NAV w p c. A h cio,
h cop w dd dico o p c d h
h pic hd cid p c.
h o codi (xiig PE i i h
cod ), h dico g . Thi
c oppoii o id PE copi. Fo xp,
h c i i h codi high-
io h ppi o h id cop, which oo
i . Th ow dico o codi i o o
wh w p id copi.
Tod iio i chgig o PE copi. A p,
hi ooo i hpd do o h gh o
cooic gowh, copd wih hdicppd -
ci , pcic o-xi poi o o co-
pi i h oc d h iihood o ogh
cig ci hd. A og h iio , pic
o PE copi i o g. B i w hod
coiio o c iiio i o codiio wih
o cooic gowh d wih icig i p-
pi dig o io o PE copi c o hi
hioic g h pid poi i igic.
Ad i cio opiiic cio, ch o i
cio, pi qi h h c o og h wi-
. Th co o ci d pch opio
o gowh.
Investment OutlOOk - ebruary
Pi qi
60
65
70
75
80
85
90
95
100
105
2011-05
-01
2011-06
-01
2011-07
-01
2011-08
-01
2011-09
-01
2011-10
-01
2011-11
-01
2011-12
-01
2012-01
-01
2012-02
-01
SEB Listed Private Equity S&P500 S&P Financials
SEB Listed Private Equity -19%
S&P 500 -3%
S&P Financials -12.5%
UJUiFibLy Wk pFOmC
During last autumns stock market reversal, private equity
companies ell more than the stock market as a whole, which in
itsel is not unreasonable. However, the slide was as large as or
the nancial sector generally, which seems to be an overreac-
tion since PE companies are not as clearly aected by nancial
problems. It is also worth noting that PE companies have risen
less than the Financials index (but more than the broad index)
during the recovery o recent months.
Soc: R Ecowi
8/3/2019 SEB report: Hopeful start to the investor year
31/35
32 Investment OutlOOk - ebruary
Oil prices will remain at high levels
Chinese sot landing will benet industrialmetals
Normal weather means cheaper agricultural
commodities
A i ppi h d, d o h wod oc
h g wih hp iig h pic,
coodi h o pod og. di
, h o ccic dpd coodii, d
o wih do-digi pcg p i c,
w h o pic gi o pcio d o
gic coodii. i pic (B cd), which wih-
ood c w, h h-
o od igic dig .
Dl i l c
Th g i o o oh iig d ig oi
pic dig h coig . Dd gowh i ci i
igh o h cocooic io w i. Mwhi
oi podcio i iig i ch coi Li, q, h US,
Cd d Bzi. cd pp d ggig dd
wod ph dow oi pic. B i i woh oig h dpi
h c dowwd dj i ocd dd i
, h oc i w o dd (h EA oc i h ch). Th i o pp dipio
h o icd pci coqc o h po-
odig gd dop o c wp-
o, o h ogoig coic i Nigi d g -
ci i h Midd E d Noh Aic (MENA) gio.
ddiio, go oi oc ow (Eop ow
w h o ic ). h o pp
dipio, h i o hp oi pic ic i oio.
Aig h o xodi , which igh
c pp o pid, w i h PEC (Sdi
Ai) wi gd dj pp o dcd dd i
od o p oi pic o USD p (ic hi
i h h Sdi Ai d i od o chi -
cd go dg). dd od pc,
hi wi ho po o d o dic ig oi
pic.
p h ig pid i o oi pic. i coi-
ig o dop h cpii o id c wpo, whi
h US d Eop iodcig cio o pd
o chg i id. Uo i gogphic w
pcd o c hoc i h co d ogh o.
Thi i c coo h Si o Hoz, hogh
which p c o o oi cgo p d igh
( hoic) co i, wih hp iig oi pic
coqc. pcic, ch p wod po d
o d coic, cdi h o co h Si wod
po ogh o di oi pic o w cod .
Poidd h o xcpio occ, w i h
dig oi pic wi i high od od USD
p , d php owh high.
Continued price decline or agriculturalcommodities
Cd
gLObL OiL DmD i CLimbig vy y
82
83
84
85
86
87
88
89
90
91
92
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
2009
2010
2011
2012
Millionsofbarrelsperday
As the above International Energy Agency (IEA) orecast o oil de-
mand indicates, 2012 demand will exceed 2011 demand by about
a million barrels per day despite recent downward adjustments.
Soc: EA
8/3/2019 SEB report: Hopeful start to the investor year
32/35
33Investment OutlOOk - ebruary
Ch ld wll d l c
Wi idi pic i o dig ?
pc, hi i h hig ig whh h Chi
coo i cig o o hd dig. Thi i cChi cco o p c o h wod idi
copio. i cio i h Chi wi xpic
o dig, d i w igh h i poi o iig
idi pic. Th h o c ig
h ioc o pcpio h h wi o dig.
io i Chi h hp, whi GDP gowh h
iid high . di cii h o iid,
d Chi h i p i h o o dcd
qi o owd ooig i o-
poic. Fig ho pic i Chi i oc o
coc h dip hi pic o i o i.
Sic o pic, xpd h LME dx
( ch), h o p c ic hi
p, cio cio i d cd i od
pic. Fho, p o idi
ig dd hi gi podc co d h i o
hp ig pic iid.
Fo zic, high pp h dd h d o iig oc
d ig pic, ig i h wih h poi
o pic ic hd.
Di high id pp d dd iio, w
i h copp h h g poi o pic p.
Ui io oh , how, copp i dd w
o gi podcio co, which coq
h i wi po cd h o oh poii d
gi pi.
gld lw h
Pic o pcio dig h cod h o ,
og oh hig c h US do gd gid
gh. od i, god h hioic -g o io, i og do,
pci god poiio d ccd iqidi
wighd o hi h h pocio h god i gd-
d oig i i o g ci. A coqc,
god pic hogh woi icd. E i
, god pic o i. W i h h i ppo
o owh high god pic dig h . Excpio
ow i o og i o co, dcd iio
i d poi h o iio p-
po hi oc.
Dcd o iig god pic h cd ici oicd podcio. h p - , god o podc-
io h icd o h x god pic. Thi i
woio ig, ic god pic h hioic i o
wh h pp hd o gd.
W h cio opiiic iw o pcio dig
h o . W p god o i, d o ow oi-
i. Boh pdi d pi ci, h oh
p .
Fll culul cd c hd
Sic o gic coodii h
how ig pic d, d w xpc hi o coi.
Dogh i Soh Aic d o h L Ni wh ph-
oo poi poppd p pic i d
i , o xcpio wh codi-
io w xpc h iio o oi hi pig. Thi
ppo o oc o h d ow pic.
coodi h h poi o go gi hi d i
coo. Th diig oc hid hi ow oc co-
id wih og copiio o gic d, d h
c h dd h o cod ic .
h c wll d cd cDig h wi coid ipo i c-
ocooic iic o h US, oo o poic i
Chi d og- o h Eop C
B (ECB), which wi di coodi pic pwd.
Ecooic d o h US h c xcdd xpc-
io i c, d h coid dci i Chi
iio op h w o coci o poic.
A p i hi dicio occd i Dc wh Chi
owd h qi o . W wi po
h p i hi dicio, which wi poid ppo
o coodi pic. Th ECB dcii wi o gi h
o o o opiiic o h .
Coodii
vOLiL mL piC Ov p Fiv y
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
London Metal Exchange Index
Ater large price upturns or metals during 2009 and 2010, prices
ell sharply during the second hal o 2011 but now seem to havestabilised.
Soc: R Ecowi
8/3/2019 SEB report: Hopeful start to the investor year
33/35
34 Investment OutlOOk - ebruary
Further weakening o the euro is likely ahead
Financially strong currencies/countries will beavoured
The revaluation o the Chinese yuan will
continue
Th coci i ppi o io d o di
wh diig oc wi pdoi i h oig xchg
(FX) . Dig piod wh io ig i,
h iqidi o cci i h o ipo co.
Sch ci pid dig ch o , o-
ig jo cci wih h ch h US
do (USD), h Jp (JPY) d h Swi c (CHF).
Rc, how, o poii i h cp io
h , id piig og cocooic
iic o h US d c o gi pi o
h o zo. Th igg coio o h icd i
ppi, how, w dciio h Eop C
B (ECB) i Dc o i ood h Eop
ig co wih iqidi. A io h dd o
hi h, h h icd dd o c-
ci o coi h how d gh, o x-
p i o GDP gowh, go d d c
cco c. Cci h hi dcipio icdh Swdih o, h Nowgi o, coodi-d
cci i h Cdi do (CAD) d Ai do
(AUD) w o gig (EM) cci.
Fudl wll h c
Th wod coo i i i wi-d- od, d h
ci cii i Eop i hig c ipc o h
coo. Tod og- oio o h o zo cii
di, d poiic d o i o pi
h wod wih o cio. B hogh h poc i o
h wo-p-owd-d-o-p c p, Eop
poiic d oig i h igh dicio d ig
gd p owd dp cooio.
Th i o ic c o ic o zo coi,
h o h c ph i o. Thi wi gi i-
o hig pc d i o i hi gz d coidh poi o go cooic gowh.
Th i ci i owh . Aid o Chi
pp oidc o hd dig d h poi o h
US coo o gow dc pc, c chg o -
id i id og o c . Th h hid
hi gi d h ow g cd xpio-
o poici, h ig i ppi.
h i ci h w o, cci cd
og go c d c cco p
hod h coi o i dd. How, w i
o po cocio, ic dop i h o zo
cii wi o i i pdic. Thi h ch
cci h Nowgi o, h Swdih o d
h Ai do, ic h h ppcid hp i
ho piod d ii o cio i i ppi.
Demand or quality in the FX market
Cuc
ULi DOLL Ck OCk mk
AUD Index S&P 500 Index
Jul
2008
Oct Jan
2009
Apr Jul Oct Jan
2010
Apr Jul
S&P
500I
ndex
70
75
80
85
90
95
100
105
110
AUDN
EER
,Index
600
700
800
900
1000
1100
1200
1300
1400
In the FX market there are various currencies that are cyclical
and move in tandem with the stock market. The Australian dollar
is the clearest example, but the Swedish krona and the South
Korean won are also aected by shiting market risk appetite.
Soc: R Ecowi
8/3/2019 SEB report: Hopeful start to the investor year
34/35
35
gl u w hd
Th o hi dd cc pi i h FX i
h o gi h US do, d h o o h
EUR/USD xchg g c wod oc
d. Wh i ppi dc, h oc
d io d o do, cig h EUR/USD
o . Sic Dc , how, hi p h
ipd d h o h o god gi h do-
h i h oc h od pwd.
xpio i h i ppi i o og o co
cocd o h odig i h o zo. Bc
o h goo ooo o oh Eop, h o i d-
ig ow d ow, whi h c o gi w o h
o zo i ogh o p i ppi p. i h -
o g wig o h o, o io igh o
h iqid US do.
Th o h wd igic i c oh, d
hogh hi wig ow o h pd, h
dowwd d i i o coi. A i og-
oio o h o zo po i di, d h
cooi o o oh Eop coi ig
o h i. SEB oc i h h EUR/USD xchg
wi d . ( p o .). W
xpc h o o o dowwd owd . gi h
Swdih o (c .).
Th do dig piod o iid woi o
h EUR, h USD h o ppcid o i ow i.
Acii i h US coo h xpcd high, wih
poii ig o oh h Aic o d hoig
. Whi h US coo cc, h Nodic co-
oi wi dc dig . Thi i wh w xpc h
USD/SEK xchg o ppci dig h cod q-
o o . p Swdih o (od o .) d
h USD/NK o ppci o . (od o .).
mxd cu m cuc
D o hi cocio o h o zo, h ooo
o E (icdig C) Eop cci do o
oo o igh. So coi i h gio o h d-
w. Hg h g pic co d,
i Roi h co i o Gc d T, d
c cco dci ig od i Pod. co,
h ooo o Li Aic cci i igic
igh. Nio c g og, d -
whi w pdic h pic o pcio d idi
wi ci dig h coig .
W o h Ai cci h h ooo.
c, Ai cooic d x
og, wih pid gowh, oo c cco p-
d ow c go d. High od id co-pd o h ECD coi o c oig cpi
d hp di h xchg o Ai cci.
Sog Ai cci c o jid poiic. Ai,
d Chi, wod i o ic doic copio
d co xpo-dpd. Mwhi idd
hohod i h W d o dc hi copio d
W coi id d o oo hi xpo.
oo o dig od piig ic i og
Ai cci, which wi ipo chp i oc
d W xpo.
Fo o h , h Chi hoii h owd
gd ghig o h (CNY). Thi ppciio
wi coi, h pc o io i i o ow
h pio. Th o i h h owdow i go d-
d i pig dow Chi xpo gowh d h iio
p i Chi h d i c oh. W xpc h
USD/CNY xchg o d . i Dc
(h CNY i dig od . od).
Investment OutlOOk - ebruary
Cci
Source: Reuters EcoWin
Jan2011
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2012
Feb6.25
6.30
6.35
6.40
6.45
6.50
6.55
6.60
6.65
USD/CNY
6.25
6.30
6.35
6.40
6.45
6.50
6.55
6.60
6.65USD/CNY (onshore)
USD/CNH (offshore)
yU vLUiO WiLL COiU
The Chinese authorities have gradually revalued the
yuan (CNY) against the USD. The pace o yuan ap-
preciation has slowed somewhat due to lower infation,
fagging export growth and a generally stronger dollar.
We oresee a USD/CNY exchange rate o around 6.00
at the end o 2012. The chart also shows Chinas mirror
currency, the CNH, which oreign investors can buy.
8/3/2019 SEB report: Hopeful start to the investor year
35/35
SEB is a North European nancial group serving 400,000 corporate customers and institutions and
more than ve million private individuals. One area with strong traditions in the SEB Group is private
banking. From its ounding in 1856, SEB oered nancial services to wealthy private individuals.Today the Group has a leading position in Sweden and a strong presence in the other Nordic coun-
tries and elsewhere in Europe.
SEB Private Banking has a broad client base that includes corporate executives, business owners and
private individuals o varying means, each with dierent levels o interest in economic issues. To SEB,
private banking is all about oering a broad range o high-quality services in the nancial eld tai-
lo