Politicians need to listen to electorate

Writing in Dagens Industri today, Fredrik Reinfeldt, the former prime minister, argues that the election of Donald Trump as president reflects a high level of voter dissatisfaction, and politicians would do well to listen to the electorate.

Noting the high number of older people among Trump’s voters, Fredrik Reinfeldt claims that politicians need to ensure that society gives this demographic group the opportunity to work longer and show more respect for the experience they actually have. Additionally, older people have purchasing power, which makes them important consumers, who need to be taken seriously. They are the consumers of tomorrow for many of the services that are now being launched, which is why both companies and opinion leaders need to be more responsive to their views.

Nevertheless, “we should not listen too much to demands to turn the clock back and re-create something from the past,” he states.

Banking industry slams new tax

Finance minister Magdalena Andersson has proposed that a new payroll tax of 15% should be levied on financial sector, staring 2018.

The Swedish Bankers’ Association (Bankföreningen) has warned that the new tax will put 16,000 jobs in the sector at risk, while SEB CEO Annika Falkengren forecasts the transfer of banking services to the Baltics.

Swedbank warns that the level of service will be affected, and the cost will be passed on to consumers.

Magdalena Andersson has promised to analyse consumer costs and the transfer of jobs abroad, but is convinced that the additional tax revenues will create growth and jobs in Sweden.

Volatility likely

The US elections are likely to overshadow every other event in the news this week, and regardless of whether Donald Trump or Hillary Clinton wins, the market is likely to be volatile in the coming days.

In the event Clinton wins, a relief rally is expected. Markets and yields will rise and the Swedish krona will probably strengthen. However, if Donald Trump were to win, markets could plunge by 8-10% forecasts SEB. Short-term bond yields are likely to fall sharply, particularly in the classical safe haven markets such as the United States, Japan and Switzerland. The krona will weaken to well over SKr 9 against the US dollar and to over SKr 10 against the euro.

Just how the election will impact on the financial markets in the longer term is unclear, but geopolitical insecurity will increase with Donald Trump as president, which would suggest lower yields and markets. On the other hand, the USA’s budget deficit is likely to increase with Trump at the helm, which would speak for higher yields and markets, mulls Dagens Industri.

With Hillary Clinton in charge there is likely to be less drama; most investors believe that the u-turns on free trade and the financial and pharmaceutical industries have more to do with election rhetoric than anything else.

On Tuesday night/Wednesday morning we will know. Fasten your seatbelts, advises the business daily.

Historic order in sight

The government is making a serious attempt to sell the fighter jet Gripen to India, a deal that would be the largest ever in Swedish history with a value far over SKr 100 billion. The Indian government recently sent an invitation to defence group Saab to participate in the tender for fighter jets.

Next week a delegation from Sweden, including enterprise minister Mikael Damberg, travels to India, on the initiative of Marcus Wallenberg, who is leading a new Swedish-Indian business cooperation. ABB’s CEO Johan Söderström, Alfa Laval’s CEO Tom Erixon, financier Carl Bennet and Saab’s CEO Håkan Buskhe will also be part of the delegation.

Mikael Damberg comments on a possible sale of Gripen: “It would not only be the largest deal ever, it would also mean a close partnership between Sweden and India for decades to come, which of course would mean a great deal for Swedish industry and our potential to grow in the whole of Asia.”

Hexagon CEO accused of insider trading

One of the Stockholm stock market’s most successful directors, Ola Rollén, was arrested on Wednesday by the Swedish Economic Crime Authority (Ekobrottsmyndigheten) on behalf of the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM). He is accused of insider trading with the Norwegian biometric company Next.

The suspected insider trading took place on 6 and 7 October 2015 when Ola Rollén’s private investment company Greenbridge Partners bought 284,341 shares in the Norwegian biometric company Next Biometrics for 46-49 kronor per share. On 9 October Greenbridge announced that it had bought 3 million newly issued shares at 60 Norwegian kronor per share.

The news that Greenbridge had made a large purchase in Next meant the shares rose by 83%, from 47 to 89 kronor. If Ola Rollén knew with certainty that the new shares would be issued when he bought shares days before then he is guilty of insider trading.

Ola Rollén’s Norwegian lawyer Erik Keiserud said that he did not have insider information when Greenbridge bought the shares.