SEB Financial Officers' Index: Subprime Angst Continues to Bite
International subprime angst continues to affect sentiment among Swedish financial officers. Compared to three months ago, Swedish Financial Officers have become less optimistic about the future business climate. At the same time, worries concerning a potential fall in demand have increased further. SEB’s Financial Officers’ survey, sent to around 50 of Sweden’s largest companies, shows that one in three financial officers is now worried about a potential fall in demand. At the same time, the financial officers show resistance and it appears that interest in making strategic investments both in Sweden and abroad has risen. SEB’s Financial Officers’ Index for November stands at 59, below the level of 60 in August (65 in May), but still well above its neutral level of 50. “With its increasing impact on international credit markets, the US subprime crisis seems to have affected sentiment among Swedish financial officers, which in turn could have a negative impact on economic growth,” says Louis Landeman, credit strategist at SEB and co-author of the report with Hanna Holmberg. “At the same time there is increased interest in carrying out strategic investments. This suggests that financial officers’ confidence in their own company’s financial strength and business remains strong.” SEB has also reached an agreement to acquire 100% of the shares in KAM Group Limited (Key Asset Management), a London-based manager of funds of hedge funds. The acquisition is an important step in SEB’s strategy to continue to grow in the alternative investments segment, a fast growing area of the asset management industry.