Johansson could face vote of no confidence

Sweden’s much-criticised Public Employment Service (Arbetsförmedlingen) plans to split into three, providing a job matching service, and two centres, one for employers and one for job seekers. The agency describes the reorganisation as a “quantum leap” but does not intend to cut its 14,700-strong workforce.

The board has already approved a change in IT service management, and will decide on the other changes in the autumn.

Employment Minister Ylva Johansson does not wish to be interviewed, but suppliers are critical, with one saying that the proposal shows the agency is out of touch with reality.

Elisabeth Svantesson, the Moderates’ labour market policy spokesperson, slates the agency’s timing, given that a majority in Parliament want to close the Employment Service. Johansson is taking a risk by defying the wishes of the Riksdag and not ordering an inquiry into its possible closure and could face a vote of no confidence, according to Svantesson.

 

Time for reflection

Sterling suffered a steep fall on Friday after the shock election result in the UK, wallowing at 1.2735 against the dollar and 0.8783 against the euro.

The weakness of the pound is negative for Swedish export firms as well as for those in the UK importing components to their end products, comments Ulla Nilsson, head of the Swedish Chamber of Commerce in London.

Kitchen company Nobia, which is exposed to the UK market and saw its share price fall by 2.6% on Friday, is already feeling the effects, while construction firm Skanska says it is not greatly affected since it has its revenues and expenses in the same currency.

Claes Jacobsson, head of Scania UK, argues that the outcome of the election will allow time for reflection. “A hard Brexit is not what companies and industry want; it creates too much uncertainty,” he says.

Finance Minister Magdalena Andersson is cautiously optimistic, saying, “If the outcome is that the British want a close relationship to us after they have left the EU then that is good.”

Government backs down over banking fee

The government is backing down on the proposal to raise the resolution reserve fund fee. This is the second time in a short period that the government reverses on taxation of banks. In February, it withdrew a proposal for a new bank tax, replacing it instead with this rise in the resolution fee.

The purpose of the resolution fee is to create a buffer for any future financial crises. In its final form, presented yesterday, the original changes were either gone or had been toned down significantly.

Nordea has discussed plans to move its head office to Copenhagen or Helsinki because of the fee. However, the bank had no comment to make on Thursday.

Finance Minister Magdalena Andersson had previously commented that there are benefits for taxpayers if Nordea leaves the country. However yesterday her tone was milder, “Nordea is of course welcome to stay in Sweden and we see a significant point with having a head office in Sweden.”

Representatives of the alliance were pleased with the government’s U-turn.

Trump policy hitting Swedish export companies

After almost five months in the White House, Donald Trump’s trade policy is still unclear. This uncertainty is affecting Swedish export companies.

“The only concrete things we have seen is that he wants to renegotiate the North American free trade agreement Nafta, and that he has withdrawn the USA from TPP, the deal with Asia. We do not know more than this,” says Anna Stellinger, director general for the National Board of Trade. She continues, “Uncertainty is never positive. Not for trade and not for companies that want to invest.”

Anna Stellinger points out how important a market the USA is for Swedish companies. The board has calculated that 139,000 Swedish jobs are linked to Swedish exports to the USA.

Successful deal for Sandvik

FAM, which manages the Wallenberg Foundations, is purchasing Sandvik’s golden nugget Process Systems (SPS) for five billion kronor after a tough bidding war. The sales price exceeded even Sandvik’s expectations.

SPS had a turnover of 1.7 billion kronor in 2016, and DI reports it has an operating margin of around 20%.

SPS is the first larger acquisition that FAM owns 100%. “We feel mature enough to work with a wholly owned subsidiary,” says Lars Wedenborn, FAM’s CEO.

Gardell paves way for power shift

The news that Cevian Capital has bought more than 5% of the capital in Ericsson is just further proof that Investor and Industrivärden have failed to control the telecom giant, suggests Dagens Industri. Well-run companies with an efficient structure and a competent board of directors do not receive visits from activists. No activist would dream of buying a share of Atlas Copco, or any other company in the Douglas sphere, continues the business daily.

It is quite feasible that Christer Gardell’s Cevian Capital will call for the elimination of different voting rights, which would raise the value of the company. If Christer Gardell chooses to pursue the matter, it is reasonable to assume that he will receive the backing of Industrivärden and institutional owners, thereby paving the way for a shift of power.