Weak exchange raises earnings expectations – Swedish newspaper Svenska Dagbladet

While Stockholm Stock Exchange, hitting new record and more and more warning of a stock market bubble, it’s time for listed companies to report their figures for the first quarter. And expectations are pretty high.

– And rightly so. It is mainly due to the weak exchange that provides a great boost to corporate profits. Then of course an exceptional interest rate that helps. And for quite a few companies will help falling commodity prices, says Mattias Eriksson, equity strategist at Nordea.

During the second half of last year profits rose by 5-10 percent. Now counting Nordea analyst with profit growth, adjusted for non-recurring items of over ten percent in the first quarter compared with the same period last year.

HH: Is there not a risk that expectations are too inflated?

– There is a giant hard question, the expectations are of course very high as the stock market has been strong, but at the same time it should go very well for companies, so the companies can deliver earnings growth north of 10 percent, there are good prospects for the stock market will continue to rise, says Eriksson.

The first of big companies to report the SKF engineering group who place their numbers on 17 April. And it is mainly engineering companies that benefit from the weak krona. According Mattias Eriksson favored mining group Boliden most of the currency.

– Where should we see a very strong earnings, both compared to the first quarter last year and a profit improvement fourth quarter as well.

Even Peter Malmqvist, independent financial analysts, noting that expectations have been ratcheted up since the last reporting period and it is related to both the weak krona and the prolonged stock market upturn. This despite the fact that six out of ten companies did not meet analysts’ forecasts in the fourth quarter.

– What matters here is of course the rising USD and it has probably influenced the analysts to revise their forecasts.

Malmqvist count myself with profit growth landing at about 13 percent on year in the first quarter.