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Copenhagen Stock Exchange: Focus 35: The Worse, The Better …?

Date 17/12/2002

In Focus no. 35 equity strategist Henrik Henriksen, Jyske Markets, assesses the situation on the global equity market and the consequences for the Danish market.

Much seems to show that the earnings of US companies are finally on their way up, assisted by interest rate and tax reductions in the USA. The economic upswing has, however, been somewhat weaker than normally. The industrial production is diminishing in the three greatest economies: the USA, Japan and Germany. To this should be added that the US economy is pushing debt and savings issues aside - issues that will have to be addressed at some time. None the less, analysts and investors still widely expect to see progress.

Henrik Henriksen sees a risk that the expectations for 2003 are still to high, and that the equity market is in the middle of a prolonged slide sideways. In such a market the need exists for a dynamic investment strategy, which involves the increasing of risk in a weak market and the reducing of risk in a strong market. So, for the investor the motto goes: the worse, the better. . .

An upswing on the Danish equity market depends on better international trends and not least the timing of when the pension funds and foreign investors will once again become net buyers of Danish shares. Normally, the Danish equity market is a good defensive market. However, experience from history indicates that a further weakened dollar rate will squeeze the Danish equity market.

Read the Focus no. 35 by clicking here