Foreign ownership in the stock market decreases by SEK 400 billion

This week, SEB wrote in one of its newsletters that foreign ownership on the Stockholm Stock Exchange has decreased by SEK 400 billion since the beginning of the year. This means that foreign ownership of the Stockholm Stock Exchange, which amounted to 40 percent at the beginning of the year, has fallen to 37 percent.

The share of foreign-owned government bonds has fallen to just over 5%, compared with 20% a few years ago. It is of course the poor performance of the Swedish krona that has led to this.

As a result of the weakness of the Swedish krona, Swedish engineering companies, which rely heavily on exports, are now making fantastic profits as they sell in dollars, euros and almost any other currency except the Swedish krona. At the same time, international investors are selling their Swedish shares due to concerns about the Swedish economy, exchange rate and future prospects. Everyone knows that when sellers appear in the market, share prices fall, which in turn makes these companies’ valuations look crazy low when, for example, a p/e ratio valuation is made. For this reason, a valuation based on cash flow is preferable, even if it takes several hours to complete. That said, be cautious about buying solely on the basis of low P/E ratios as no account is taken of a – hopefully short-term – weakening of the krona.

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