Morgan Stanley cuts price targets on Swedish banks

Investment bank Morgan Stanley has lowered its share price targets for a swathe of Nordic banks.

Sweden’s Dagens Industri reports that the sector analysis hits Swedbank, Nordea, SEB and Handelsbanken.

The recommendation on Swedbank is raised to ‘overweight’ from ‘neutral’, but the target price is down to SEK130 from SEK136.

Nordea, SEB and Handelsbanken retain a ‘neutral’ weighting recommendation.

However, Nordea’s target price is cut to SEK78 from SEK84, SEB is cut to SEK53 from SEK58, and Handelsbanken is cut to SEK242 from SEK248.

Funds danger

Dagens Industri also carries a warning from equity strategists that the continued falls in share prices on Stockholm’s OMX today could trigger a wave of redemptions by funds investors.

That could in turn put further selling pressure on the market, causing a downward spiral of prices.

“Fear is breeding fear,”  Nordea equity strategist Jonas Olavi is quoted by the paper.

The challenge to professional investors is that when psychology starts to steer the market, it makes the job much more difficult for analysts and stratgists, he suggests.

But, even as retail investors in Sweden may be looking to sell in panic, there is evidence that foreign institutional investors have been buying into Swedish assets, according to Claes Hemberg, economist and spokesperson for online stockbroker Avanza.

“We saw foreigners buying yesterday. The Swedish krona is interesting as a trusted currency, and foreign institutions are looking for companies with a focus on exports,” he is quoted by wire service TT.

 

 

 

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