Huge orders rolling in

Volvo-owned Mack Defense has received two major orders for 1,500 trucks from the Canadian Armed Forces. The deal is worth SKr 5 billion.

Communication director for Volvo Group Governmental Sales Grégoire Verdon, says, “One of the pillars in our strategy is to develop business in other parts of the world… Canada is an example that our strategy is giving results.”

This is first time Volvo has succeeded in selling a European truck to a defence customer in North America. “This is a good opportunity to show our group’s abilities,” says Grégoire Verdon.

iPhone losing to competition in Sweden

Android mobiles from Sony, LG and Samsung continue to rush by iPhone when it comes to data speeds, according to this year’s review from Bredbandskollen, a service that measures connection speeds. The best-positioned iPhone lies in 18th place.

Rickard Dahlstrand, project manager from the Internet Foundation in Sweden, says, “My theory is that Apple has not optimised its telephones for the Swedish networks. Among the other suppliers there are those that consider Swedish operators to be bigger clients, whereas Apple is more focused on the USA.

Match for London

The government wants to utilise the British EU exit to attract companies to Sweden. Finance Minister Magdalena Andersson says, “This will be negative for economies in Europe and for Sweden. However there could be potential for a number of companies that otherwise would have made investments or have their head offices in the UK which now choose to move to Stockholm.”

On Monday Magdalena Andersson and Enterprise Minister Mikael Damberg met to discuss how Sweden could attract companies from London. Mikael Damberg has already been in touch with a number of Swedish companies and the government is considering increasing its presence in London to attract foreign investors to Sweden.

After meeting with around 50 representatives of Swedish enterprises, Magdalena Andersson said, “It has been important for us to listen to business about what they want to contribute to this process”.

Chaos to reach Sweden today

A weekend has passed since the UK voted to leave the EU and the unexpected result has begun sinking in amongst investors. The USA stock exchanges fell 3-4%, London by 3.2% and around Europe the markets fell between 6 and 13%.

Sweden’s public holiday on Friday meant the Stockholm index avoided the immediate chaos on the stock market. However trade is expected to be intense today and the initial drop could be around 4%.

Nasdaq decided to call a state of emergency on the derivatives market before opening on Monday, a measure last taken after the Lehman crash in 2008, to facilitate trade continuing as usual during the current circumstances. Joakim Bornold, economist from Nordnet, says, “This sends a very strong signal from Nasdaq and shows concern about how the market will look on Monday.”

Concern boom may end too soon

The National Institute of Economic Research, NIER, (Konjunkturinstitutet) forecasts that the Swedish economy will continue to strengthen and that GDP will increase by 3.6% this year, followed by 2.1% in 2017 and 1.9% in 2018. The unemployment rate will fall to 6.3% in 2017 before increasing again, as more refugees who have been granted residency are included in the statistics.

NIER’s Director General, Mats Dillén, says that educational measures and subsidised forms of employment will be needed to bring down the unemployment rate in this group. The social partners should also look at wage structure to ensure that it does not become to expensive to hire people with a low level of education and little experience of the Swedish labour market, he comments.

The boom in the economy and the deviation from the surplus target for government net lending indicate that fiscal policy should be tightened already in 2017. Mats Dillén point outs, however, that the surplus target is under review and the growing challenge of integration needs to be taken into account, saying; “The situation we have with immigrants underlines the risks of tightening [policy, ed.] excessively so that the economic boom comes to an end too soon”.

All acquitted in HQ trial

Stockholm City Court has cleared Mats Qviberg, Stefan Dahlbo, Curt Lönnström, Mikael König and auditor Johan Dyrefors of fraud charges in connection with the HQ banking scandal.

The origins of the trial date back to August 2010, when the Swedish Financial Supervisory Authority (FSA) withdrew HQ Bank’s licence, as prosecutors at the Swedish Economic Crime Authority claimed the bank and its parent company HQ had not followed International Accounting Standard 39 when valuing options in the trading portfolio. Yesterday the Stockholm court ruled that HQ’s method of calculation was permissible.

Chief prosecutor Martin Tidén says he wishes to read through the court’s ruling before he decides whether to appeal.

Vattenfall earns billions but sees risks ahead

State-owned Vattenfall’s cash flow will improve by 4 billion kronor annually, as a result of the political agreement to abolish the output tax on nuclear power and lower the tax on hydropower. Additionally, with the risk of massive write-downs reduced, since the utility does not need to close reactors ahead of time, Vattenfall may be able to turn loss into profit.

Just days after the agreement, Vattenfall decided to invest in independent core cooling in Forsmark’s three reactors and the intention is to make a similar investment in two of the reactors at Ringhals, thereby extending the life of the reactors to the 2040s.

Vattenfall is critical of the decision by politicians to subsidise the expansion of renewable energy. Torbjörn Wahlborg, head of Vattenfall Generation, says there is a clear risk that electricity prices will be low for years to come, which will have an impact on all electricity producers.

Volvo in arms deal

The Volvo group has received an order to supply combat vehicles to Syria’s neighbour Lebanon, reports DI. The funds for the order come from Saudi Arabia and the vehicles will be produced in Renault Trucks’ plants.

The deal would have been impossible in Sweden, but in France Volvo has received help of the government. The order is signed by Volvo/Renault Trucks and Odas, a marketing company set up by the French government and arms exporters in 2008 (ed.).

According to DI, Saudi Arabia has informed Odas and Volvo that the deliveries are to be stopped since Hezbollah has gained too much influence over the Lebanese government. The paper suggests that the vehicles could end up in Saudi Arabia.

Review of Riksbank

A parliamentary commission of inquiry should be appointed to review the role of the Riksbank and interest rate policy, according the Riksdag Committee on Finance.

“We have agreed on a broad review of all the important issues regarding the Riksbank. The only exceptions are the foreign currency reserve and asset management, where we instead welcome suggestions,” Fredrik Olovsson, the Social Democratic chair of the Committee, has said.

He told Dagens Nyheter that macroprudential supervision would not be under review either.

Good news for Riksbank

A TNS/Prospera survey published on Wednesday showed that inflation expectations five years ahead have risen from 1.8 to 1.9%, the highest level since the third quarter of 2013. Employer expectations rose from 1.9 to 2.0% while money market expectations remained unchanged at 2.0%.

Salary increase expectations rose 0.1 points to 2.3% over one year, to 2.4% over two years and 2.3% over 5 years. Nordea has commented that this is good news for the Riksbank.

According to the Riksbank’s own survey, firms are experiencing continued low price pressure and are finding it hard to raise prices despite relatively healthy demand.