Telia eyes TDC

The Telia management is keen to acquire Danish operator TDC, according to Dagens Industri sources. However, if Telia is to realise its plans, it will have to raise money to fund the deal through a rights issue to shareholders. TDC is valued at some SKr 40 billion. It is uncertain how the government, which owns a share in the operator, would react to such a move though.

The business daily also reports that TDC intends to take measures to avoid being bought out, and has plans to make an offer on Swedish broadband and cable operator Com Hem, valued at SKr 17 billion.

MTG close to deal

Sweden’s Modern Times Group (MTG) is poised to sell its media channels in the three Baltic countries. SEB has been looking for a buyer for the Baltic businesses since November and a deal that could give MTG a capital injection of one billion kronor is said to be close.

Concerns have been raised over the sale of the businesses, with warnings in Latvia that a change of ownership in the country’s TV channels is occuring at a risky time, given the culture of misinformation that is often part of Russia’s foreign policy.

“I see a risk since we do not know who the purchaser is. MTG has a major influence on Latvian society, and maintains a high standard,” says Aija Calite-Dulevska to the news website.

Tough blow for Stockholm

In August 2015 the Swedish government announced plans to make Stockholm a leading financial centre in Europe. Seventeen months later, the same government has plans to levy a 15% payroll tax on the financial sector. Such a move could eliminate up to 10,000 jobs in Stockholm, according to the Swedish Bankers’ Association and consultant Copenhagen Economics.

Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, is deeply concerned, saying the proposed tax would “knock out Sweden’s main economic artery”.

Falkengren steps down

Annika Falkengren is stepping down as chief executive of lender SEB to join Swiss private bank Lombard Odier as managing partner.

Falkengren has been chief executive of SEB for 11 years and worked for SEB three decades. She successfully guided the bank through the 2008-2009 financial crisis and now leaves it in a much stronger position than when she took over as chief executive.

Talking to Svenska Dagbladet, Falkengren said she was unsure whether to stay on a few more years, or to switch career. “I know all about banking and finance, this is my life but I have not felt that I could go to one of SEB’s competitors. … For me, it’s about daring to do something difference before time runs out …,” she said.

Falkengren will leave the lender by July 2017 at the latest. She will also resign from the boards of Foundation Asset Management, Scania and Volkswagen.

Government forced to back down

The Swedish government has abandoned plans to present a bill to make listed companies increase the number of women in their boardrooms, after the centre-right opposition and the Sweden Democrats on the committee on civil affairs joined forces and refused to back the plan. Enterprise minister Mikael Damberg describes the decision as unfortunate.

Daily newspaper Dagens Nyheter is critical, suggesting Damberg’s proposal was inadequate in that it was focused on listed companies and did not include large companies such as the Bonnier group. A politician who is passionate about an issue must do all he/she can to get a bill through parliament, and this includes getting other parties to back the proposal, writes the paper’s Pia Gripenberg.

Sandvik mulls listing of SMT

According to business daily Dagens Industri, Sandvik is considering listing its Sandvik Material Technology (SMT) division, which produces advanced stainless steels, on the Stockholm Stock Exchange later this year.

Despite the challenges facing the steel industry, this might be the perfect time to take the division public, argues the newspaper, noting that the best performing large cap on the Stockholm market last year was SSAB, with a gain of over 100 per cent.

Andersson critical of Moderates

Commenting the surplus in public finances, finance minister Magdalena Andersson (S) says the Swedish economy is strong and the tight fiscal policy has been effective, creating more than 120,000 jobs since the current government came to power. She does not want to increase public spending for the time being, but would like to prioritise job creation, welfare and the widening gap in society.

Referring to the current debate on defence spending, Andersson does not wish to promise any extra funding for the Armed Forces at present. She expresses surprise over the Moderates call for an increase in the defence budget this year, saying they had not included such a proposal in their shadow budget last autumn: “I have not been heard any analysis from them which explains why they have changed their minds. The Moderates must explain their behaviour, but I find it remarkable”.

Finally, Ingves!

Statistics Sweden is to publish December’s inflation data on Thursday and experts are forecasting that inflation will reach its highest level in more than five years, which is bound to delight Sweden’s central bank, the Riksbank.

Swedbank, for instance, has forecast that the CPIF will rise to 1.8 per cent in November, while SEB has forecast 1.9 per cent. CPI is expected to be a fraction lower.

The bad news is that the expected increase is linked to the rise in oil prices rather than to enduring factors such as price increases on services.

“Negative interest rates a success”

In February the Riksbank will have had negative interest rates for two years. The extreme interest rate situation has forced pension companies to hunt for returns while producing halcyon days for property companies.

In DN today, governor of the Riksbank, Stefan Ingves, defends the policy. “Negative rates have been a success. Inflation is now rising and is expected to climb to two per cent. At the same time we are experiencing good growth and employment is growing,” he says. According to the Riksbank’s most recent forecast negative interest rates will remain unchanged until the beginning of 2018.

Ingves believes that as long as the Riksbank sticks to its guns then the improvements will continue and abandoning negative rates too early could have serious consequences: “the krona would probably quickly rise against other currencies. Then exports would fall and unemployment increase. Meanwhile inflation would slow and diverge from the path to the two per cent goal.”

Banks prepared to lend more

Three of four Swedish bank managers expect to increase lending to companies this year, according to Almi’s coming Lending Indicator. Carina Nordström, head of business areas at Almi, says, “It is very positive that the banks have a bright outlook for 2017.” She also points out that Almi’s lending reached record levels in 2016, mainly to innovative growth companies.

However Günther Mårder, CEO of the Swedish Federation of Business Owners, believes that although many expect credit growth because the Swedish economy is strong, lots experience difficulties with banks and the smallest companies are finding it the toughest.