SEB report: Hopeful start to the investor year

8/3/2019 SEB report: Hopeful start to the investor year

1/35

InvestmentOutlook February piv bkig - ivm gy

u wud h c


2/35

3Investment OutlOOk - ebruary

Contents

Sg

odcio..........................................................................................................................5

S ...............................................................................................................................6Mco ...................................................................................................................8

Pooio co: Mod Pog.............................. ............ 10

Th: Spi wiig od h co ................................ .................. 13

Th: Pocig o gi o cop ............................. ........................ 17

CL

Eqii................. ................................. ................................ ................................ ............. 20

Fixd ico ............................. ................................ ................................ ........................ 24

Hdg d ............................. ................................. ................................ ........................ 26

R ................................ ................................ ................................ ......................... 28

Pi qi ................................ ................................. ................................ ................... 30

Coodii ............................ ................................ ................................ ......................... 32

Cci ................................ ................................ ................................. ......................... 34


3/35

4 Investment OutlOOk - ebruary

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4/35


Times change, and so do perceptions o what

is a good and a bad risk in the capital market.

Right now a certain calm has descended over

nancial markets. But behind todays orecasts,

new tensions and issues are building up globally,

which will increasingly aect our investor world.

Sic g, w h who w d i go

cpi . Wiig o i h g icd,

d w h gi ig poi i i ppi

ic No . Th owd dg c h

Eop C B (ECB) oo cio. P ip,

d h hig i od o o: iqidi, cooic

d d o io. c oh, h

h o h igh id.

Woh cig o i h dig hi piod o jo,

-chig dciio h d i od o o h

og- po o h o zo. i, o , h -

c o h ECB o o pp wih iid iqidih h do h jo o iig i ppi.

Mwhi w o h GDP oc o ic-

ig gopd od gowh j o h wh

w xpc o gowh i po. Th cod h o h

i xpcd o h h , d w h -

o o dg o hop h hd. Soi wh h

co i i io, h xpcd c hpp.

igh o h o, i hi i o Investment Outlookw

h xpod io i cio i dph, i c

h xpcd hpp.

Th o zo cii i d w hi wiig, d i io

w i wi po p o o i o og i o

co, which ji oh h ic i hi i.

Righ ow ci c h dcdd o cpi .

Th co iw o go gowh i i hoogo,

d oc idic o gowh. Eop h

p iqidi, d h i ppi h icd.

B hid od oc, w io d i

idig p go. Th wi icig c o io

wod.

Tod w h oh po h, i coi,

i x high. Th h og pop who ppod o c h pio o gowig o

od pop. ddiio, i o d o coi, w

d w chid who xpcd o ci i

gig popio ig o. Thi wi i q-

io o ig, d d how wo d copio wi

o. Th x wi co chg i od o c

pic co copio. W wi ocd o o

ogh dciio.

hi cio, qio wi id o cpi

pp, how ig wi i p d ocd, d how

iig dd wi iid. Th wi iig

i, wh podcio g i

di w. Mo pop pci h og go

o wo. Th i copii o di gio wi

chg. W wi oppoii i h x w .

Ad o o h wi xpcd.

Hans Peterson

CIO Private Banking

and Global Head o Investment Strategy

iduc

Times they are a changing


5/35


S

exctatios*nxt 12 moths

rasoig *Fc h b u vw d d u cc wh c .tu isk

equitis 8% 18%

Neutral outlook in the short term, Positive in the long term. Low valuations in many countries, exceptthe US, which has continued to deliver positive surprises. Limited upside, since volatility is already low.

More stable balance sheets in various sectors, including banking. Many emerging markets ell sharply in

0 and are now considered relatively cheap. High, stable returns but aected by growth in the OECDcountries.

Fixd icom 7% 9%

While OECD governments have weakened nancially in recent years, companies have instead become stronger.This is the undamental reason why we arePositive towards corporate bonds and Negative towards govern-

ment bonds. Government bond yields are expected to rise slightly this year. Meanwhile yield gaps between

corporate and government bonds may shrink considerably/corporate bond prices may rise, as the market

realises that current pricing, especially o high yield bonds, refects an excessively pessimistic economic scenario.Risk appetite will also benet emerging market (EM) debt.

Hdg fuds 4% 5%Positive. The market climate is especially avourable towards CTAs and credit-oriented hedge unds. Our ocus

is on non-equity-related management and unds that replace government bonds rom a portolio standpoint.

ral stat 4% 5%

Neutral. Transparency is still low. Credit problems pose a risk, but the market is resilient. Strong demand

or properties in primary markets has squeezed yield requirements, but interesting cases o good returns

can be ound.

pivat quity 11% 25%

Neutral.Good growth and low valuations (large discounts) mean sizeable potential in the longer term,

given an improved market climate, but nancial uncertainty will generate worries in the short term.

Commoditis 6% 18%

Neutral/Positive. Increased risk appetite has lited most commodity prices in recent months. A sot land-

ing in China is the key to continued upturns or industrial metals. Normalised weather conditions will lead

to alling prices or agricultural products. Oil price levels will remain high.

Cucis 3% 4%

Neutral. Given a continued increase in risk appetite, EM currencies should benet rom interest rate di-

erentials and growth. China is likely to continue revaluing the yuan (renminbi) against the USD, though at a

slower pace. The USD will be stronger than the EUR, with its overhanging southern European debt crisis. Theyen is regarded as overvalued.

1 The orecast reers to the global stock market. 2 The orecast reers to a basket o investment grade and high yield.3 The orecast reers to a basket in which the energy, industrial metal, precious metal and agricultural commodities categories are equally weighted.4 The orecast reers to the alpha-generating capacity o a oreign exchange trading manager.

XpCD ik D U (X mO)

iOiCL ik D U

(FbUy , O JUy , )

Cg i OU XpCD U

Equities

Fixed incom e*

Hedge funds

Real estate

Private equity

Currencies

Commodities

0%

2%

4%

6%

8%

10%

12%

0% 5% 10% 15% 20% 25% 30%

Expected volatility

Expected

return

Hioic d o h oowig idic: Eqii = MSC AC Wod EUR. Fixd ico = JP Mog Go GB EUR Hdg. Hdg d = HFRX Go Hdg Fd USD.R = SEB PB R E EUR. Pi qi = LPX EUR. Coodii = DJ UBS Coodii TR EUR. Cci = BcHdg Cc Td USD.

-5%

0%

5%

10%

15%

20%

25%

2008-11

2009-02

2009-05

2009-08

2009-12

2010-02

2010-05

2010-09

2010-12

2011-02

2011-05

2011-09

2011-12

2012-02

Equities Fixed income* Hedge funds Real estate

Private equity Currencies Commodities

Fixed Income

Equities

Private equity

Commodities

Real estate

Hedge funds

Currencies

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

0% 5% 10% 15% 20% 25% 30%

Historical volatility

Historicalreturn

iOiCL COLiO

(FbUy , O JUy , )

Equities

Fixedincome

Hedgefunds

Realestate

Private

Equity

Commodities

Currencies

Equities 1.00

Fixed income -0.47 1.00

Hedge unds 0.58 -0.31 1.00

Real estate -0.13 0.0 -0.04 1.00

Private equity 0.85 -0.37 0.67 -0.14 1.00

Commodities 0.24 -0.18 0.68 -0.04 0.38 1.00

Currencies -0.18 0.20 0.13 -0.12 -0.06 0.03 1.00


6/35


S

Wig i mOD pOCiO

Wig i mOD gOW

Wig i mOD ggiv

OLLig -mO COLiO v. mCi WOLD

(U)

-80

-60

-40

-20

0

20

40

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Equities Fixed income Hedge funds Real estate

Private equity Commodities Currencies

pFOmC OF DiFF CL iC

R i i i Dc .

Hioic d o h oowig idic: Eqii = MSC AC Wod EUR. Fixd ico = JP MogGo GB EUR Hdg. Hdg d = HFRX Go Hdg Fd USD. R = SEB PB R E EUR. Pi

qi = LPX EUR. Coodii = DJ UBS Coodii TR EUR. Cci = BcHdg Cc Td

USD.

Soc:SEB

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8 2 00 9 2 01 0 2 01 1

Fixed income Hedge funds Real estate

Private equity Commodities Currencies

6%

0%

7.5%

0%

0%

20%

30.5%

36%

0% 10% 20% 30% 40%

Cash

Currencies

Commodities

Private equity

Real estate

Hedge funds

Fixed income

Equities

Previous Current

1.5%

2%

0%

0%

0%

17%

79.5%

0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Cash

Currencies

Commodities

Private equity

Real estate

Hedge funds

Fixed income

Equities

Previous Current

10.5%

4%

4.5%

0%

0%

30%

34%

17%

0% 10% 20% 30% 40%

Cash

Currencies

Commodities

Private equity

Real estate

Hedge funds

Fixed income

Equities

Previous Current


7/35

8

mc u

Global economic risks have decreased...

...and the US economy in particular has

delivered upside surprises

But many worries remain, so it is not yet time

to stop being vigilant

Th wod cooic iio h iid hi wi.

C cio h dcd h i h ci

. Th o zo coi h hi p

owd g coodiio d dp igio. d-

diio, xpcd og cooic ig h -

pci poi i h Uid S, ig woi o

go cio. Th i jo i, how, o

xp i h o o dp cio i oh Eop,

diiihd i i high i p o h -

ci d d go ic d o

copii d d ow.

Hig pio hd c gi i, o i cio

o gowh i h ECD coi ow o cd.

A i, dp o zo cii i h igg h,

whi h poii poi i od i h US coo.

io wi d i p o h wod dig ,

h o ow coodi pic d ow o co ic-

. h gig (EM) ph, ow iio wi

op h w o i c. o poi ocooic dig d gowh h wi hod p i w.

U c d u c

Th US wi oid cio wid gi, hogh h

co i cd Eop po i d, igh

ci codiio d ow dig. Y h Eop

d cii wi c oc o o US co, d

coid d dgig i h US hohod co wi

o i gowh. Fd c poic oo i o

coci h xpcd hi , h hdwid wi

og x . W xpc GDP o ic . p c

i oh d . Upo wi i o .

p c i . Co iio i xpcd o ow

. p c hi . Thi op h w o h

Fd R od pchig pog h -

, po ocig o ogg-cd cii.

ll l d d h u zTh o zo coi c pi choic hd.

Addiio c ighig i cii-hi coi h i o

o xpio o G d h

Eop C B (ECB) wi i dpig h cii

d cig poiic io, h h c

io ig o iiio. So cocooic iic

h poidd pid pi, d h h igh

po i cooic poic. Th ECB h o -

ig p o h ig co. G d Fc h

idicd op o ow ipio o h B

, h ig ci . Th o ic

dg coo w o-idd go i

oh d Spi. Th i o dp o zo cio

h h dcd owh. W xpc o zo GDP o

hi h p c hi d h gow o

h . p c i .Olc wll bh wh

Sic h o zo i h Uid Kigdo o ipo

dig p, ig p c o xpo, oig d

co i h Biih coo. Y h igh po i i-

d w i cocio d ic. T ogh,

idico copi wih gig coo,

hi Lodo pic G wi poid gowh i

io co. W o GDP gowh o h . pc hi d . p c i . io wi

p o w ow h B o Egd p c g i

. Fh c od pch h i.

dc cu l uhl d wd

Vi owig xpo, ggig opii d gi wh

c, h Nodic cooi h g cd

o zo po. Now d Swd, xpo h

pci hd hi c h o h i

gi hi cci. B h o og doic d-

d, h Nowgi coo c hd h

h o i Nodic igho. W o Nodic GDP gowh

o o p c hi d p c i .

Stabilisation and some hope or growth

Investment OutlOOk - ebruary


8/35

9

J h dl

Jp cooic co i coiig, hogh od

pc. GDP gowh wi o h . p c i d

i o p c i . V xpio c i

d cocio h di Mch

iig dd. Th dg dci i xpcd o xcd

p c o GDP oh hi d x. Go d

wi gow o o p c o GDP x . E h

d o h wi p o id oc i h coo-

, o dio wi i dic. Aog wih h x

og , hi poi owd h o ig.

ll wh

Ecooic xpio h d i Ai gig (EM)

coi, h gio wi i gi o h wod

coo. W xpc h piig owdow o d hipig. Gowh wi h cc gi. Sog go

c d copi ci wi

h cooi ii. Low iio wi ow oo o

o i . So coi h d c

i , d o wi oow i .

Dpi o dcio, Chi GDP cid o h

xpcd i h oh q. Q-o-q, gowh c-

pdd p. A c ccio occ hi .

W o GDP gowh o o h . p c i d

p c i . io h dd igic i

c oh, d h cooic poic oc wi h hi

o cooig iio o ppoig gowh. Mo po-

ic h d d owig qi

o , d h o hi id hd. Th

o o o o xpio c .

di gowh d iio h o owd, giig h c-

o o ow i i . Th p

o ii , how, ic pic ic i

h high. Ui Chi, di h w go c

d h co c poic o i h coo.

W xpc GDP o ic i o h . p c hi

d p c i .

L c wll lw h , ccl

A GDP gowh o od . p c i Li

Aic, w o owdow o o . p c hi

. A h h i good chc o wd ccio

oh i h gio who d i i pc-ig coi

Agi, Bzi, Chi d Mxico. Li Aic iio

i ig od wi i d p -. p c oh hi

d x. Th Bzii c i pic i i

o coi chig dow i i i . Aid

o i c i io coi, Li Aic i

howig coid pic dg d d g

h ECD coi.

D cc u

E (icdig C) Eop cooi g oig

o i . Expo d cpi pdig ow

owig, copio wi hod p w i coi,

ic hohod pchig pow wi o ow i-

io. GDP gowh wi coi o w hi , h

p i . Ri d Pod wi cop wih h o

zo cii i w, h Bic coi d h Czch

Rpic wi g dc, whi Hg d Ui wi

og h hd hi coi. Th dic d,

og oh hig, o h iz o xpo d how dpd

o i h o zo h coi .

Th o dic, copii xpo d pio gg-

i dg-ighig, h Bic coi h ocd

c ic dp cio. h p ,doic dd h d ig o iii x-

po-di p. Th Bic cooi wi gow .-.

p c i , d i o x . Thi ig c

cco dci h g iid d hi co-

pi h od. Th h coi h o

gd o ii pic co d od .

ll wh

A g o p c, w xpc go

GDP (d pchig pow pii) o ic

. p c i d p c i . Wih gowh g-

o .- p c , h EM ph i i hd o

h ECD coi, which wi gow id .- p

c. W h id o gowh oc o h wod, h

EM ph d h ECD coi pwd copd wih

o No i.

Mco


ky CUig CyCL i biC COUi

Brazil, key interest rate (SELIC)China, key interest rate (lending rate, 0-1 years)

India, key interest rate (repo rate)Russia, key interest rate (refi rate)

Source: Reuters EcoWin

2003 200 4 2005 200 6 2 007 2008 2 009 2010 2011

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

27.5

P

ercent

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

27.5

So ar the Brazilian and Russian central banks have lowered their key

interest rates in this cycle. It should not be too long beore the Peoples

Bank o China and the Reserve Bank o India ollow suit. What has paved

the way or a loosening o monetary policy in the BRIC countries is a

combination o lower growth and ading price and cost pressures. Lower

interest rates help sustain economic activity and make the BRIC countries

more attractive or global investors.


9/35


mOD pOCiO

Thogho , Mod Pocio h xpod

o ow o h i idpd o cooic

d. Th ihiiig co o h pooio h

h iqidi iio i Eop. Dwidig codc

w , wih -high i co-

qc, iig oowig co o h PGS coi

(Pog, d, , Gc d Spi) d woi o

o cop gd icd iqidi i dig .

To d hi iio, h Eop C B (ECB) o-

d d i coiig o o iid h o

ow i ( p c) o . Thi cio h

w-cid, d iqidi i h cdd. A w od o

dig i o xpcd i F.

Th c o ipod iqidi i h ci i

high ii i Mod Pocio. Dig Dc-J

h pooio o o h . p c. c

o co ix oh o cho dggig. go

cocooic pic i g chgd, d o h

poiio i hi pooio.

W xpc iio o od p c i o ECD

coi. Mwhi go od hioic ow.

G - id h d p c ic

Sp . Sic go id co ow

zo, i i i ig o owd iig id

h h oppoi, d h poi o gig -

i coig o d o difc.

h xd ico -pooio, w h coi o h

p c i d, wih poi o g

i io o iig id. High id od c-

co o h p c o h -pooio, d j

ow p c coi o gd o, which c

dcid high id od, wih oig , which

o h co i h pci cop. ocio

o gig (EM) od i i ow p c.

Th hdg d -pooio, which oc o Mi-

Sg d Eqi M N, coi o c i-

i i h pooio. Sic No, w h id wih

Cdi Log/Sho g, who po cop-

oh o hdg d d xd ico pooio.

Th cc -pooio ( p c o Mod Pocio)

i poiiod ccodig o o h Ai

cci wi ppci gi h US do. Mo o

i i i Dc d J cd cci

o gi o o h i o d i. Th -

pooio o . p c dig h wo oh.

h who, w i h h Mod Pocio i w-

cd wihi i ow-i d. Th pi i i i

h iqidi iio, which dio i h

. Bic, d hod i coo gi, d

h h pooio wi co i h w w h hiwi. go d g i h , d h o-

w id wih o c ocio.

Those who run too ast may easily stumble

Liquidity support to the nancial system has put Modern Protection back on course, while risk

appetite has given Growth and Aggressive a push. These portolios remain positioned to benetrom better global economic conditions, while able to withstand most alternative scenarios.

17%

2%1.5%

79.5%

Cash

Currencies

Hedge fundsFixed income

pl

c:

md ip


10/35


mOD gOW

Sic w wo o Investment Outlooki id-No

, i h cod igic. Woi o

cio i Eop h o dd. d, h xpio

i h h h picd i g gowh i Eop, d

io h co id o ig goo. W wo

i co hid og ci poc: )

Aic co iic w h xpc-

io i Dc d ) h Eop C B (ECB)

od d coi o o chp h o (h

Log T Rcig pio, LTR) o i iid

o.

Th co idic h h US coo wi coi

o gow i w, o c i h

h o o h pc o pi h g o ow.Co codc w owh ow, pchig

g idic w poii owh ow h

xpcd, pi copio w w d o

iic gi w, o io w co. Th i

h icd i h US co d d o dow-

id h h pid pi.

Th cod co, which w iw idic qii

ig, h c dcd h iqidi i i h ig

. Gi dcd iqidi i, c oc gi -

gi o d o h i o o og- d

d c oi. Th ECB wi c o w LTR

od i F, po ig p h d

poi ipoig i ppi.

Ahogh iqidi i h dcd, h o zo coi

o c d go d d cdiii po-

. W wi o oio o og i o co,

jdgig o h pc o poiic cio o . W c h

o o wd -p o woi o h o zo

hi . A hi wiig, o xp, h poigh h d

owd Pog.

W h o d dic ocio w

c dig h p ix oh. Thi i pci cw do o i h h go ooo h chgd ch.

Mwhi h poiic o poc i Eop i ig

i. Sic Sp, h qii -pooio h

o ci id i Ai d h Nodic coi

h wh w o h gowh poi. Eqii

h ccod o od p c o h o pooio

hogho hi piod. Dc, w ocd go

d o h ppo o dcig c xpo

o Eop. A h chg, h qi -pooio i

owh o poiiod owd gowh h i h US

d Ai, wiho hig chgd h pooio o xpo-

o qii. Th oco o h qii -pooio iDc-J w p o p c, wih EM

h dig h w.

Th xd ico -pooio o o p c dig

h piod. Wihi i, w h coid o xpo o

high id od, wh w o h high i-djd

poi . Th id gp gi go od

o igic d Ag-Sp iqidi d

cdi i o, pci i h o zo, ic h

i h d i dciig d, which h d h

pooio. Dig J, h US do o g o w

gi EM cci, which g ph o o EM od

id i oc cci. Th w do o d o

cci -pooio, which o o . p c.

Coodii, which hd ogh , d i

. coodii -pooio o p c dig

Dc-J. Thi c, which icd hig

o og jic o idi d god, i gcd i h ho h d o h do, i h

og di diig oc dpdig o h co-

odi. , w o od p poi i o

i cio, hi c coi o diic-

io d iio pocio, cig og- ii i h

pooio. W pig o p c poiio.

Th hdg d -pooio i o p c o

Mod Gowh, wih oc o CTA g gi,

which d o hic od. Ahogh p

h gi h dc o o i h oppoi di-

cio copd o oc , h h h poi o

chg hi poiio wh d ii. Dig h o

c piod, w h o CTA g o i

h go p, o h oh hd h h i

o hp wh h go dow chciic

h pod o good dig . i c whh h

g wi o dig , w i

h o g cp o dpig hi gi i

h dig d chg.

Pooio co: Mod Pog

10.5%

34%

17%

4%4.5%

30%

Cash

Currencies

Commodities

Hedge funds

Fixed income

Equities


11/35


Pooio co: Mod Pog

mOD ggiv

Ri ppi h i hp ic Sp, wih h VX

oii idx ig o o od o ow . W

idicio h h d owd -co coiow d wihi c dig h g o

. Mco iic, pci o h US, i o

h pid wih dig idico igig coid co-

oic xpio. cd i ppi, ow coio

w di c d owh o

cocooic pic h cd i o ci ic

w wo h Investment Outlooki id-No.

W h o d dic ocio w

c dig h p ix oh. Thi i pci c

w do o i h h go ooo h chgd ch.

Mwhi h poiic o poc i Eop i igi. Sic Sp, h qii -pooio i o

ci id i Ai d h Nodic coi h

wh w o h gowh poi d w

h h poiio ochd. Eqii h ccod

o od p c o h o pooio hogho hi

piod. J i Mod Gowh, i Dc w ocd

go d o h ppo o dcig c xpo-

o Eop. A h chg, h qi -pooio i

owh o poiiod owd gowh h i h US

d Ai, wiho hig chgd o xpo o qii.

Th oco o h qii -pooio i Dc-

J w p o p c, wih EM h

dig h w.

Th xd ico -pooio o . p c

dig h piod. W h coid o xpo o

high id od, wh w o h high i-djd

poi . Dig J, h US do o g o

w gi EM cci, which g ph o o EM

od id i oc cci (o p c).

Coodii, which hd ogh , d i

. coodii -pooio o p c dig

Dc-J. Thi c, which icd hig

o og jic o idi d god, i gcd i h ho h d o h do, i h

og di diig oc dpdig o h co-

odi. , w o od p poi i o

i cio, hi c coi o diic-

io d iio pocio, cig og- ii i h

pooio. W pig o p c poiio.

Th hdg d -pooio i o p c o

Mod Aggi, wih oc o CTA g -

gi, which d o hic od. Ahogh

p h gi h dc o o i h op-

poi dicio copd o oc , h h h po-i o chg hi poiio wh d ii. Dig

h o c piod, w h o CTA g o

i h go p, o h oh hd h

h i o hp wh h go dow

chciic h d o o good dig . i

c whh h g wi o dig

, w i h o g cp o dp-

ig hi gi i h dig d chg.

7.5%

6%

36%

30.5%

20%

Cash

Commodities

Hedge funds

Fixed income

Equities


12/35

13

h

There are many actors capable o invalidating

our base scenario

I growth is surprisingly ast, the main

beneiciaries will be cyclical shares,

commodities, EM debt and high yield bonds

I Europes sovereign debt crisis worsens, this

will especially impact Western and Eastern

European equities, bank shares and European

high yield

J p h hhod o oh d , pic o qi-

i d oh i cid pid. Aoh p w

h h VX oii idx o (-) ow h hi-

oic g cig diiihd ci i ci

d iig . E i h i o

o opii w h h wod coo w gd hi-

ig io high g. E i w chd

piig good cooic iic, pci i h US.

i h w

Th d ci h g ii. A

o , iii opii io o wihi wo

oh. Th i o w cig oci i h

Midd E d Noh Aic (MENA). A , h wg coc o dipio i oi podcio, d oi

pic od. Thi phd p wod iio, hig h

coo.

Th x hoc occd o Mch , wh Jp w hi

di. Th cooic coqc w p

dop i h Jp coo, w jo dipio i

dii o idi good o Jp o h ooi

id i h US d wh.

W ld ch h

Togh h cood h wod coo, which d-

cd p dig h cod d hid q. A

wh h ood i h ci wod w dc

i pi o hig, dic dioio occd

i Ag. Wh iggd i w h dowgdig o h US

oig cdi ig Sdd & Poo. Th w oiig coc h h US wod d p i cio d

h Chi coo i hd dig. To op i o, h

Eop oig d cii cd hp, wih Gc

i h pic.

c d d c h

Hio h how h wo i co dp ip-

io o : ) jo cooic owdow,

wih ccopig ic i cooic woi d o

high iio i h w o pid iig coodi pic

d h Jp di, d ) cig o-

ig d cii i Eop, p h c h io coi

wh i h wod w hi cdi ig dowgdd,

icdig h US.

B h d o , how, opii d gowig o cooic idico did pid pi

i h US, d i oh p o h wod. E

Surprises may be waiting around the corner


iOy i pig iLF


2005 2006 2007 2008 2009 2010 2011

Percent

0

10

20

30

40

50

60

70

80

90

Both early in 2011 and initially in 2012, the VIX volatility index

(see chart) was at historically low levels, which indicated a rather

calm and positive mood in nancial markets. Last year this calm

was interrupted ater a couple o months.


13/35

14

i , o pog w o d i gig h d

iio i Eop. T ogh, h co cd h

o iw ci i io.

b w h l uu

cio o gi wih iio i which

h wod coo h c iid d h i o go-

cio h cdd. Jdgig o hi wi -

xpcd poii co ig, h i o good poi

o gd ghig o h coo hi . Coid

-oo o poici i ii idi coi,

copd wih ow oig od id, poi i h

dicio. Gi hi cio, w i h o

io ci wi o ccodig o h o

pg .

B wh h i d oppoii h igh d o

, o wo, cooic cio? Ad how wod hi -

c h o io ci ?

lcd cu

Ahogh jo i i, h c cooic pic

o i h ECD coi cd, hig

hd c gi i . W i igig

p c poii o o cio, whi h wo -

i wih pid d dowid pi, pci

ow oh coidd o h p c poii.

No, h poiii w d p c,

pci.

Th i og i o co cp o iidig o

cio d chgig h ooo o i poii o

gi dicio, h oowig co po o

pci ipoc:

Ccic pi gd i oc

TheunfoldingoftheEuropeansovereigndebtcrisis

Areturnoftheinationordeationspectre

Monetaryandscalpolicymanagement

Geopoliticalevents

Unpredictableshocks,blackswans

Fd, h coo h i ow hh. L i

pc, i od i pii cc wih p h

o o - d dow h o o

o. Y h i oc o h coo hd o pdic.Qi o, h gowh i o p o h wod d-

d gi o cc o dc, wiho hig

ipo i h co io ppig o h c-

chgd.

B h coo i o o i pc. d i i odi-

i jcd o co ic o oh poii d

gi co.

d c cl w

A igic popoio o w doid h g-

i cooic c o ) high iio, which didhohod pchig pow d ) h Eop oig

d cii. Th w oc o gowh i wo ch-

. Th w pic dg-ighig d h cod

w gi ci cio, which od h

ood og hohod d i, wih h -

c o h coo .

A joi o oc ow pp o h g-

poi o pid pi i h US coo d h

g poi o dowid pi i h Eop

oig d cii. o i h oh co

wigh hi, oh h h pic

co h doid h ic d di pic o

h p w oh. A c Ag/Sp ,

how, h w g coc o poi US c-

io. i o o hioic o xpod

io h . B hi do o oic h

h co wi ipo dig dig .

pc xc ud l

High iio i h w o hp coodi pic ic-

doid . Thi , w dic cood-

i pic i, h hod igic c o

pic ic i oh h ECD coi d h EM ph.

Low iio hohod pchig pow d h

Th: Spi wiig od h co



2005 2006 2007 2008 2009 2010 2011

35.0

37.5

40.0

42.5

45.0

47.5

50.0

52.5

55.0

57.5

60.0

Index

COOmy i LDOm LF i pC

The textbook image o an economic cycle is usually a s i-

nus curve without dips, but reality seems quite dierent,

as illustrated by the jerkiness o the JP Morgan global

purchasing managers index. Behind this is the recurrent

existence o both positive and negative actors capable

o infuencing the economy.


14/35

15

pi copio. o p h w o i

c i ho p o h wod coo wh h i oo

o c h, i oh wod i i EM coi, h

iig h coo.

A c owdow i h iio , o diiio, i o

co o i cio o , h p -

how h d c oi h high

id xpcio o wh wi hpp o pic. Dig

d oo h cooic d ci cii o d

h h o , h w widpd coc o d-

io ( g dci i pic). Thi w d o hioi-

c xpic h howd h cooic ci wih ig

ci d pop pic oi oowd

og piod o dciig pic o good d ic w.

Thi coc did o po jid, how, d

h d o woi id hid o high iio,

d i d coodii d i

qii ig h US Fd R i pic.

Dig , idicio h pc o dio wi

i i co. M ECD coi did i h id

o h-hdd d cig, h popc

o oh ipoig cooic iio d high ci

pic wihi . Th pc o iio wi po

i i co oo, ic wg d co coi o

i d i h ECD coi. P o id podc-

io cpci copi d cio wi o

iio d o xpio.

cc lc u c

fci cooic poic o poid pi. Fo xp,

o o xd ico d ow h

Bzii i c dig . Th ECB iiqidi ppo o Eop i Dc w o

xpcd ih. Sic h o h cop

o Lh Boh c h o

ocd o dop coio o poic hod

(qii ig, i od pch) oc hi i-

wpo o o o o iio. B h

ipc o h w o poic oo o h coo,

ci d pic oio i o c.

Aoh oc o ci coc how ch coi

wih dg dci hod igh c poici o h o

hd ig i id hi w cooi d wid-pd oci d, o h oh hd, dd ig

d d d iio iiio.

Th qio i how o c do o c i h,

o h who, do o h h wod coo oo ch

pc phid pci h io Mo

Fd (MF) whi ig h ppo o d, h

ig i ow i w o hi

idd coi.

No o ow, d hi i wh h o cooic poici

i ECD coi i o pi d

i w. Sch pi o occ i h EM

ph, o xp i h o o xpcd pid i

c o od o, o igic o cio

o h i wpo h xpcd od.

h lcl wld lcl

Th gopoiic wod i pcd wih i d o h

g cpci o pi. oio xp i h oci

o i h MENA coi cd c w

i h gi o h c wh gi L Ni which og

hig oppd oii gi, diid pow d

dw poiic p. Th c chg o pow i Noh

Ko oh xp.

Dig io w d h W wod,

wih h US d i dig o, igh p c

p pci i woi o oi podcio d dii

d o i o xpi oi. Wh wi hpp o

h Ad gi i Si i o high o hi gopoiic

gd. E h o h ig o h poici o h

jo pow, cd i h Chi/Ri o o h UN

Sci Coci oc oio id Si.

Aog oh gopoiic co hi wi g

cio i o coi, which wi po h jo

ipc oid hi od w, o xp h cio

i Fc, Gc d h US.

Th: Spi wiig od h co


piC D piC XpCiO OOiOULy

ULibL


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-1

0

1

2

3

4

5

Percentchange,

12months

Consumer price fuctuations in the OECD countries have been

rather wide in recent years. As a result, expectations about which

way prices are headed have shited greatly. During 2008 infation

worries climbed, in 2009 the risk o defation was the big topic o

conversation. By autumn 2010 the danger o infation was again

ashionable.


15/35


16/35

17

h

A euro collapse would lead to deep recession

Capital market reaction would be more

dramatic than ater the Lehman Brothers crash

Portolio protection can prevent a sharp

decline in value

A h d cii i oh Eop wo d h cc

i h o pojc co dp, h xic o h

o h g o qiod. A cop o go i w

hi h co cod do h o, od

op dicio o hi h i d w. Ahogh o

i cio i h h o wi i ic d o co-i wi h coo cc, i i woh podig

h poi c o poi o cop. hi h

ic, w wi o pdic how di pic

c, w how io c poc h i h

o pojc p.

W uc h h Lh bh ch

B idicio, o cop wod d o ci

d cooic dow g i gid h wh h

Aic i Lh Boh chd i h

o . Th w o o pi wh

US hoii, hig d oh ci ii-

io ig o h i o i, cho o o Lh

Boh. F pd i wid og ci

p. Th ci id i i o, ic o o

wd o d p ig h o. Liqidi w hodd,

id o owig i oi hogh h ci chi.

Pdic, h wh o h coo o g o

q i d hohod w did cig.

Th o pojc i i cii od. Th jo -

io w coi, poiic d d o. poii-

ci p o h o hogh h cii hod i,

h i i h h cc wi o i i i c

o. Th coci oco, wih widig ipicio. oco o g

wod i h o cii-pgd coi dod h

o d cod o hi ow cci. B ch

cio wod c jo i i h ci . igh o d o ci, o h h Who

i x? A co h hd h o zo wod

o co ipo i copii, ic h o i

ow cc wod ow h h o, hi i

o oio o h o po. Thi co wod i

ocd o ip ogh o, d h iig o

zo coi wod h o p woig owd g

cooio d poiic d c io. Gi

hi oco, h o pi wod i

h i h i o pojc w diod.

A dciio o cop dio h cc io wod

xpcd d wod pood hoc h . Th

o pi wod ci, ic h i

ocig d i dc wod idi

d o oo cpi ow w o w coi d

o og o. Th ow wod c ci

dow h wod ipoi o coo. B i h

-p dciio w p c i h i, h

cooic coqc wod i dd.

Dioio o h o pojc d coio o w

xchg wod o po- xci,

pci ic i wod h o occ qic d po-

i ci o g ci ci. B wodpo cio id owd dig o

oh i d hohod, i h w wh h

i w. Th Lh Boh cop gh h i

idicio i. To oid ig o gi ig

, copi wod po id p ch d

hohod wod c o op hi w. A co-

iio o iqidi hog d pgig copo cpi

pdig d pi copio wod d o g-c

cooic pi. Th o o zo cod o oid

dp cio, d hi oo wod o h jo ipc

o h go coo.

h hu d cl

Wh, h, cod w xpc o h i hi igh

Protecting onesel against a euro collapse



17/35

18

cio? G pig, ii d iqid

wod po wo i d ci. Eqii

d coodii pic i h wod og

h ig o. h oc , go o o ig h igg o. Th, o x-

p, h US oc g h ho o

h Nodic d EM coi i c o oc ch.

h coodii , i i ccic coodii

oi d idi h h g pic dci i

oc ch. Agic pic igic

ii o chg i h coo d wod h o

cd o h x. Pcio pic i

ici, hogh. God i o iwd h i-

, i c o x ci dipio

which o cop wod c i i o dowhh god cod i ig pd og.

Th od i o diid. g, h go-

od gh wh h coo ow,

whi copo od o . Th wo po

copo od i h high id g (id co-

pi wih ow cdiwohi). Th i i

gd g g , o o

io co wiig o i.

h oig xchg , h o iqid cci

g h wh i ppi i copico .

Th US do (USD), Jp (JPY) d Swi c (CHF)

gi god i od i, od h CHF i

pggd o h EUR. S, ccic ii cci ch

h Swdih o o Nowgi o, how,

ig ig wh i ppi d.

w d w c ul u cll?

w h i i h o cop occ

d h hi wod h dig ipc o ci

wh c w do o poc o?

w i o c pooio o h i-

i i od i. Thi pooio cco o ci

pcg o o o i cpi, wih h ig

id ccodig o o idiid i ppi. Aocio

io wod did how g h poii o

o cop i dd o .

od o idi i hodig o poci pooio

i gi cio, w h cho o oo c how

ci pod dig h cii. Thi d

o h cocio h w hod ow US do, Jp d Swi c o god. Th i po o h

diid pooio o h i od o iii

i. Wh c o cop wod c h, how

poiic d wod choo o c i d wh h

wod dico h co w co pdic d

h wod c poc.

A iio, i w c q wighd cio

pooio o h o-iod (USD, JPY, CHF d

god) d oo poc o Ag , o

F , , i o h whi h MSC AC Wod

dx o qii (i o) p c, o cio po-

oio o p c.


60

80

100

120

08/08/01

08/08/15

08/08/29

08/09/12

08/09/26

08/10/10

08/10/24

08/11/07

08/11/21

08/12/05

08/12/19

09/01/02

09/01/16

09/01/30

09/02/13

09/02/27

Index

Scenario portfolio MSCI World AC, EUR

Og pFOmC FO CiO

pOFOLiO F Lm bO

COLLp

An equally weighted portolio consisting o US dollars,

Japanese yen, Swiss ranc and gold rose 26 per cent be-

tween August 1, 2008 and February 27, 2009, measured

in Swedish kronor. During the same period, the globalstock market ell 31 per cent.

Th: Pocig o gi o cop

Soc: R Ecowi

Lh Boh cop


18/35

19

L ow oo od pooio d w h

ocio. A p, pic ocio i p

c go qii, p c xd ico cii wih

owighig o copo od d p c -i i ( p c hdg d, p c co-

odii, p c pi qi, p c d

p c cci). Sch pooio o od p

c o i dig h o piod. w hd pocd

h pooio ocig p c o i cpi o h

o-iod cio pooio, o poc wod

id h - p c.

Wh d c c l?

Wih h hp o ocio o o cio pooio, w

h ccd i pig hp gi poc i

o od pooio. Wh, h, i h co o hi pocio?

i oh wod, how wod h cio pooio po i o poii ci?

A o poii ci hod o d o g i

ppi, which g pig hod c oh h

USD d h pic o god o . How, god h pod

og i c , oh dig ccic d

dc. Fo hi o, od i i difc o pdic

h dicio o god pic i o opiiic cio.

Th o h c h gh h coo wi

po o cci i diig wh god pic

hdd.

W wi p o i h co o hi pocio oo-

ig h o pooio i igic ci-

. h od dc o o i

w . L oo h poc o h od po-

oio o J o Dc , . A h w wi

c o h xci o, ocig p co h cio pooio d pig p c i h od

pooio. hi c, pocio do o o o

co , qi h co. Wh h od pooio

gid p c, h pocd pooio o . p c.

ig o o hi w h god pod piig

w (+ p c d i o) i h poii

ci w w dig . W c pc o whh

h pic o god wod ic og i opiiic

od, w hod cio o ig ch

pio.

poc hod h i , good w Mch d Dc , w wod

o pcg poi i ig h o

pooio pocio. pooio wod ic p

c, id o p c. A p, i i ci o o

i h w wi xpic oc i h o

w w i . B o d poid o how g

h co o h popod pocio igh coci .

So do i o p hi pocio io o pooio?

Th w i high idiid d i dpd o

wh i w wiig o io. w h og

i hoizo d h hogh o o cop do

o p o pig igh, w c po do wih-

o hi pocio. h iio i h oppoi, w hod

ci gi o x hogh o how w c chi i-

pocio gi h wo coci cio.


pOFOLiO pOCiO C pv

p DCLi

70

80

90

100

110

01/08/2008

15/08/2008

29/08/2008

12/09/2008

26/09/2008

10/10/2008

24/10/2008

07/11/2008

21/11/2008

05/12/2008

19/12/2008

02/01/2009

16/01/2009

30/01/2009

13/02/2009

27/02/2009

Index

Model portfolio with protectionModel portfolio

The Lehman Brothers crash helped trigger a sharp decline or

the model portolio we have described. I, at the time, we had

chosen to protect this portolio with a 25 per cent allocation to

an equally weighted scenario portolio consisting o US dollars,

Japanese yen, Swiss rancs and gold, it would have prevented this

decline.

i OCk mk LLy, pOCiO my b OO

Xpiv

90

100

110

120

130

27/02/2009

27/03/2009

27/04/2009

27/05/2009

27/06/2009

27/07/2009

27/08/2009

27/09/2009

27/10/2009

27/11/2009

27/12/2009

Index

Model portfolio with protection Model portfolio

During the stock market rally rom March 1 to December 31,

2009, the model portolio climbed 26 per cent in value. I we

had allocated 25 per cent o our capital to the scenario portolio

during this period, the total portolio would instead have climbed

by only 12 per cent.

Th: Pocig o gi o cop

Soc: R Ecowi

Soc: R Ecowi


19/35

20

Stock markets soared early in 2012 a alse

start?

ECB is providing unlimited loans to European

banks

Western economies must balance budget

restraint and stimulus

diig ci o how o i hi cpi, w w

wighig gi cpi pio. M

h cd io h woid o hig i

US cooic gowh, h Eop d cii d poi

hd dig i Chi. W i c hio i i o -

p i, d w o c dicio iiig i qi.

Thi igh ig o ci o h , c

h c ho- i copd wih high ci, w

i cio owd qii c.

M h d o o poii o. Th

po o h o o h BRC coi, wih

di dig h w (+ p c -o-d) oowd

oh Bzi d Chi (+ d + p c, pci). Th

US o coiig i Dc d o i p

p c YTD, whi Eop, Jp d Ri h g-

gd, h coi howig poii po-

c gig o - p c YTD.

Wihi h o zo h i wid dicpc w

coi. G h did oid poc, wih

h F Soc Exchg p o p c YTD, whi

po-pgd Pog d Spi oh i gi -

io o h piod.

Scowi, h i o i h d i i-

o ig i io o, d

ci. So hi , h wo co (d h

od EoSoxx idx) h cid p c, whihioic di co i co d hh c

h d i gi poc i .

Th i c g-o-w w o poii di-

h h od o whi d ix o og-

gi (ch h idd o h W wod)

d o wig ig i ho- idico.

vlu: A iod i pio i oInvestment Outlook, c io i qi

i chp i hioic ppci. o oh pic/

ig (P/E) d pic/oo (P/BV) io, o qi

d w ow hioic g, wih oid

pid poi.

Pros and cons o the early rally

qu


Positive Negative

Vio dd d c o

gowh

Low id oig qii B c h

Aw c /

poiici

Voii d ow

Copo c h Si idico oo high

Index P/E

2011

P/E

2012E*

P/E

10-yr

median

P/BV

2011

P/BV

2012E*

P/BV

10-yr

median

S&P . . . . . .

G . . . . . .

Swd . . . . . .

Fid . . . . . .

Now . . . . . .

D . . . . . .

All Nordic key ratios are based on aggregate gures (market cap)

in SEB Enskildas Nordic equities universe. * = estimate.


20/35

21

Lw ld f qu: ci dcp c-

ig o , pig id o wh d o (d o

o x i i) o o h o i- i o

h, US go od, i i i cogig i-

o o o o i i ig o g , h

icig hi xpo o qii.

Cl d lc h gd od h

cooic iio i Eop high p o hi gd. Th

ow ddicig i d oc o o o c o-

io h wi poiic ii d cooic gowh

o hi gio. Aw o h gi o h cii d

i poi ipicio high og Eop d.

Thi i o o h hig wi od i od

, coi d io go, i i

i o h Eop d ci ddig h

i hd.

C lc h , o ci x, i hp h dig h cii. Fo US o-ci co-

po, ch pcg o o (c p

c) i i high ic h , hig ood

o p c dig h . Woh oig, how-

, i h h io o o d o woh h o

o j ow p c, whi pig p c i h

h o h ci cii.

idd d lc wh: o h co co-

iig o gi iw o qii i h i cc-

io o oig d og W io. No o

do h gid o c d qi ic dgdicipi o ipo, i p idiid

io o cig co-ccic i od o i

cooic gowh. Th iio i dic o

Eop io, d hogh J od cio w

ccodig o p, h i i i d o oig d

oo. Ao p c o d h i

d dig h o oh. T- id i

d Spi c dig . d . p c

pci, whi Pog - id o o . o

. p c i h wo w o J.

u o i good hp d h -

poi id o h Eop C B hogh i

Log T Rcig pio (LTR) pog. Wihi

LTR, Eop c ci h dig hogh

h ECB p c i . Dd o h

ch o ECB dig i Dc chd EUR

iio, g xcdig i. Th Fch pi ii

dcd h i w ow h poiii o o ECB dig o pop p hi go (i.. oig

d). Th po i o co h hi dig i o d-

diio oc o cpi, h i o diio

dig o h pio oc. US ci iiio,

Ai go d oig wh d h co

w o dig o Eop whi h d cii p-

i. Th ipicio h hi ci i i g

ig ppd i h ow c h, h h

ig - o h copo co o i gowh.

vll, d h VX idx (ipid oii o S&P

idx opio) i o d o h idx. Th

VX i o io i d h hioic

dd w d h high . Hig pid d-

ig qi c, h idx h

d pc d w i F.

Eqii


US 10-year Treasuries, USD Source: Reuters EcoWin

1950 1960 1970 1980 1990 2000 2010

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Per

cent

1

2

3

4

5

6

7

8

9

10

11

12

13

14

VIX volatility indexSource: Reuters EcoWin

1992 1995 1998 2001 2004 2007 2010

0

10

20

30

40

50

60

70

80

90

Per

cent

0

10

20

30

40

50

60

70

80

90

U gOvm bOD yiLD iOiCLLy LOW

LvL

The extremely low yield oered by the US Treasury securities

market is encouraging investors to take on more risk in their

search or returns. One way they do this is by increasing their

exposure to equities.

viX iDiC pLy ig ik ppi

Since last years stock market turbulence, risk appetite has

increased in the market. This is refected, not least, by the decline

we have seen in the VIX volatility index, which dropped rom last

autumns peak o 48 to around 18 in early February.


21/35

22

Thi i o co idicio h io od

h oh go, w h h ch oo

ow d h io oo . A h ch o h

pcdig pg idic, h c h oo o idicio o i ig poi.

dc hh: h c o ow

i h VX idx, h B/B io og US io

pid dic dig J. o c -

ig o poii o d hopig o oio i

Eop, coid poii pi i h US coo d

o dig i Chi. W h c io, i hioic

ppci, picig i oo poii cio.

Wighig ogh h po d co, w d p cocdig

h codiio o o h oc h

c o h o c oh, o o hi pid i

d picd i od. Th oc h good

poi o d w o zo, io hod p-pd o p id.

Ou c dl cu llc

Th c iio i h o zo h cd owh.

h co id h d cii h h g o h

ipc o pic. Fo xp, iig h pic

i c oh c i cid o piig

og cooic gowh i oh h US d Chi. A c-

o Investment Outlook, w pig o

oc od o ocio w di coi

d gio. Wih h o zo cii o og ohdow-

ig oh co, h od gio

ocio gid. A w, how, i i ipo o ph-

i h od i w dic ipicio o i.

Th od hod gdd oo o xpi how w

io d wh w i wi di h.

No o ch h chgd i o iw o h copdo h i o Investment Outlook(No , ).

W h i h h co o h h po-

i o di h oc o co ppci.

Th co GDP gowh, o poic, c poic,

ci ii, io d cc. Ech co i -

igd co d o i poii o gi coiio

o h oc i ch pci co. Th co

o - o +.

Ch d h dc ll

c gi, Chi co high i o od. M o

Chi i o pp o Ai i g. Th giohigh gowh i o c. B i wh go cooic

gowh i ow i hioic d, io wi po

icig oic o h wid gowh gp piig w

Ai d h Dopd M (DM) coi.

A coqc o ig ood pic, pio high i-

io p i Ai h d, which hod oc

i w. Hohod pchig pow i i-

ig, pci ic ood co g cco o g

popoio o o Ai hohod copio. Low i-

io op h w o o xpio o poici.

Whi i i h W h d pd co

o zo, h i wpo i odd i h E.

cooic cii dwid o did x, Chi c

o x oo c c. Looig h ci

ii co, h co g op co. d p

i h wod g d i go d i ow. Looig

hd, h o idicio h Ai cci

wi ppci ( h Cci cio).

Th Nodic coi d Ri o po w i o

od, d h iiii wih Ai d Chi o

. i difc o cop i o gowh ,

h ci hh o h Nodic d Ri i good d

h i oo o dop o xpio c d opoici. Aoh iii i h oc i h co-

i o pod w dig . o iw, h

oo dd h ig. o

o hi w poc i h io i iw h EM

ph d h Nodic coi piph , io

which h c o p o i codiio

o. B i , h oc h d

coc, hogh h i i i pi o oc

h hod gd hi.

uh u wh h

Th o zo h cod i oo ig i o od.

Th gio poii co c i oc

chp o io dpoi d c o

Eqii


0

1

2

3

4

5

2007 2008 2009 2010 2011 2012

Bull/Bear ratio 10-yr average

my ivO XpCig COiUD

OCk mk LLy

The percentage o investors with a avourable market view

climbed sharply early in 2012. This indicates higher expectations,

with more and more market players pricing in a ar more positive

scenario ahead.

Soc: Boog


22/35

23

poic c gdd high xpio. Th ECB -

c ppid o wih EUR iio,

ciiig hi cig d d ig h o

wi o h i o iqidi hog i h ig .

B ohwi, o o hig i wighig dow h o

zo. Th c coiig o go i h wog dicio

o oh Eop cooi, d w icig o o

oc h h o zo i oig owd id c-

io. Th igg oc o ci, how, i h

poiic c. Ahogh ipo p h

owd g cooio, h i jo -

io w io, poiic d d o. S

oc i h gio w od hp i

poiic dop ig pid pi, w do o

i hi i i woh ig. Mwhi codiio

g w oh d oh Eop. G

cooic ii, o xp, h pid pi i

h p oh, d h o w xchg i ig

h co ipo xpo co. Expo o G

copi h h h poi o o i-

.

Eqii


COUNTRY/

REGION

Growth Monetary

policy

Fiscal policy Financial

stability

Valuations Currency Total

Ch

u 9

dc 9

bzl

id -

U - -

J - -

u z - -

OU giOL m mODL

In our stock market model or country allocation, we select those actors that we believe will set the

tone, based on the market climate we see beore us. Each actor is assigned a score based on its posi-

tive or negative contribution to the stock market in each respective country or region. The scores vary

rom -3 to +3. This time around, we believe that the ollowing actors can generate dierent potentialor various stock markets: GDP growth, monetary policy, scal policy, nancial stability, valuations and

currency.


23/35

24

Companies fnancially healthier thangovernments

While governments have become

inancially weaker, companies have instead

gained strength

...which is the basic reason why corporate

bonds are more attractive than sovereign

bonds

Pricing o high yield bonds also relects an

overly pessimistic economic scenario

Go od h diio gdd

xd ico i, oowd ogg d copo-

od i cdig od o i, i c hh h dic o o hi iw.

g wh h US ogg cig i

, cd i h pci o o ogg

iiio opig i h -pi co (pciiig

i o o cooic w hohod). h w o

h pci, h w hp dci i h pic

o ogg-cd cii, oowd h o

go ci d cooic cii i iig o. S

Eop coi w whi hi ci,

which d h ow o ogg d o hi

id o h Aic.

Thi coid wih o oig d cii c-

d i Eop, dig cdi ig gci o dowgd

h cii id go, i o

c o j . Fo good o, h oig od

o coi d o o x hi ogg

od h h o ch o hi pio

xd ico i. Wh h US o i AAA cdi

ig o Sdd & Poo i Ag , hi co-

id o h d gi ood dig Ag

d Sp. Tod o go i h wod

o hi op cdi ig. Th icd G, h Uid

Kigdo, Swizd, Now, Swd, Hog Kog d Chi.

Th ooo o go c do o good.

Thi i pci o h io po coi o

Eop, o h US d Jp. Th coi c o ogh pdig cc, w x d i-

c, i od o dc hi g dg dci d ow

h gowh o hi ccd d. P di, c

poic i o ECD coi wi h ighig i

o gd o h piig cooic ph.

oh wod, h i pcic o oo i coi

o diio Ki iiio poic ig c i-

.

l cl

Ecooic poic poiii o hpig i h co-

o d h ci co i h ig hi o c. Th US Fd R (Fd) d o od

qic giig o pp zo i poic, w

chig i qii ig (QE) : p-

ch o go d ogg-cd od.

Th Fd h o d o coici o

poic wpo. Th o i i poic -

ig i J w poi h h piig . p c

i wod po pp i . o

jdg, h Fd o ch hid od o qi-

i ig (QE) hi .

Li h Fd, h B o Jp h cid o g p-

ch o cii (id o go cii, o

copo od d qii). Th Jp i

i g xpcd o i . p c o

. Th B o Egd i wi pd

. p c o og i o co, d h ciig o BoE

od pch w id i F o GPB i-

io o GBP iio.

h Cb ul

Ui i oh jo cog, h Eop C B

(ECB) id i i wo p o . p c dig

pig d . Dig h , i dco d c h o p c gi. Th i

i o i h i . Mwhi h

Fxd c



24/35

25

Fixd ico

ECB i coiig o pp Eop wih iid

iqidi d i ig h od o o zo po co-

i i h cod .

Dig , go od id i ch co coi

h US d h UK wi cd codico oc.

Lg cig d d popc o igh i p-

pi poi owd high id, whi ch ow iio

d c od pch g i o

o ow id. oo-i oc i owh iig

id o go od i h co o h .

Coc wih h ci dioio o go-

i h p , h iio o copi

wodwid d h o h od h i h ipod

i io pc.

Copo po did, og oh hig,

dd o h good d ic h copi podc,

h xp chgd o hi ico d how -

ci hi podcio i.

Th wod coo i idd ow i p, i i p-

dicd h hi wi oowd gd

high gowh d dd. Wg d i h g

xp i copi i icig ow,

d o w o . Togh wih coid i

good podcii (podcio p ho wod), hi wi

i io ic i xp p i podcd,

which i icid h o ipo co hid i-

io i h ECD coi. ddiio, h hp p i

coodi pic i d i h

oowd ig pic, owig podcio co o co-

pi o h wod.

p h l c

Mwhi h ci hh o copi h gh-

d i diio. Th po o ch podc

od h chd o cod i o pc od

h go. h US, copo po (ig p h o

copi i h S&P qii idx) h gow

g o o . p c o h p ,

wic h co GDP gowh. A h

o US io ico, h h h icd o od p c h o h ii o o h p

c i . B idicio, hi d wi coi dig

h x .

Copo c h h o co og d

o . D h d copi h x-

dd h ii o hi od o, owig h i o

d d pci. ddiio, copo i

h id idig p g o iqid .

Thi h gi copi i c o xpcd d

d chg i hi i io. A co-

qc, h dg o ig iqidi cii h dcd.

Aog copi h i high-id od, h -

pc g i J w . p c, copd o

. p c i d . p c i No

(h p dig h ci d cooic cii). Ahogh

Mood cdi gc pdic h h pc wi

ci o . p c i J , hi i w ow h

g ic ( p c).

C cll h

To i, od copi o cooic d

ci og h go. c,

copi o o ci o h ogg

d. Thi i h d o wh copo od

pci high id ci o io.

ddiio, h picig i h high id od g i-

dic h h wod coo wi oo d p i jo

cio, which i o o . Gi h po-

pc o igh cooic poc d gd

i i i ppi i ci , h wid id gp

w copo d go od hod hi

ig i pic ic o copo od.


10-year government bond yield, KRW Spot USD/KRWSource: Reuters EcoWin

Jul2009Oc t Ja n

2010Apr Jul Oct Jan

2011Apr Jul Oct Jan

2012

Percent

3.50

3.75

4.00

4.25

4.50

4.75

5.00

5.25

5.50

5.75

USD/KRW

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

m Db WLL pLCD iF ik ppi i

When the mood improves in nancial markets and the

desire to choose riskier investments increases, emerging

market debt is well positioned. For an investor in the

OECD countries, the return on such investments comes

primarily rom rising exchange rates or EM currencies,

but also to some extent rom price gains on EM bonds.

The adjacent chart shows data rom South Korea. Dur-

ing the third quarter o 2010 and the second quarter o

2011, or example, the Korean won rose at the same timeas the bond yield ell/bond price rose.


25/35

26

Liquidity support to banks improves the risk

environment...

...and potential or Relative Value

Macro and Trading still the best diversication

Sic h i o Investment Outlook(pihd

No , ), hdg d poc h id

gi. A h i o piio, h i o i h o

zo cii. Php woh ddig o coc d

o h cooic owdow i Chi d dowgdig o cd-

i ig o d io o zo coi. Ui

h Investment Outlook, w c o h cocooic

iic o h US h poii o i ppi. Th

HFRX Go Hdg Fd dx o . p c dig hoh q o . Thi w igic h i h

hid q, wh h idx o . p c. Fo

who, h dci w . p c.

A jo gi howd gi i , wih

Eqi Hdg poig h o wo wih dow-

o . p c. Mco d CTA gi howd i

gh oig o . p c dig h piod. A

i pio i o Investment Outlook, w chooig o

diid h hdg d io o i gi:

EquityLong/Short

RelativeValue

EventDrivenandDistressed

MacroandTrading

qu L/h

Ahogh oc g o owh dig

h h oh o , g ci pid.

Voii w h high. Codico d coig -

o cooic popc d oio o h o

zo po did o hp c ii. h co-

o, h US co cid h ppo o co

d h poidd pid pi. Mg coq

dcd hi o xpo d h did o ih

o h oc o poii poc dig

h q. HFRX Eqi Hdg o . p c i h oh

q o , whi HFRX M N o . p c.

Fo h , hi g w -. p c d -.p c, pci.

Th coid d cii d xpcio o poo co-

po po i o h coid gi ipc

dig h q o . Th poii o cio

i h o zo h icd, d ppo o hi iw i

ii i pic, which hod idic h p

h po d dicod o h gi.

Wh Eop chi g ci o oio

o i woi, w i o o o codiio, i

which d co c gi dcii, hi

i. Exc o, w wi i cio owd

Eqi L/S dig h x w q. M N -

gi i high o o i.

l vlu

Fixd ico gi g coid o g -

dig h q o , hogh o owh

x h i h hid q. Th pio po-

igh o go cii o o god

dig h co i , wh oh h i gd

d high id o i. Liqidi dio-

d owh owd -d, d h w h -

dc og g o p hod igh ho

poiio i h . Thi h cod o o h p ih.

Th cocooic i o o zo -p d

owh i Dc wh h ECB ocd iqid-

i ppo o i (hoic) iid o p

c i. A hi go i coo cpio,

p o h d ppciig h poii

ipc o h o i h gi ic o

zo cii. Scc od i i Eop o

coi i J o coi o o o poi-

i iw o xd ico . Th d i d od

Gc i o o, how, d h jo

ipc o h i h w.

Europe headache and hope or managers

d ud



26/35

27

Mg i cic d gi, h i

oppoii good, pci o high id copo

od, which h o p p wih h od p. Th

po good ig oppoii h d h, ohi Eop d wh i h wod. h who, h i-

o oo owh o cd, d w poii

owd Ri V dig h x q.

D d Dd

E Di gi cod d, o-

o hid q, d i hogh h oh q wih

poii poc. HFRX E Di o . p c

dig Q, whi HFRX Did . p c dig h

piod.

Spd h owd g d cqiiio p-pochd hi coig d w jo coiio o h

poii d. M&A cii dcid igic dig h

cod h o w owh high h i .

Acii d d o h owh ipod

ci, oii d coid cooic ci

ocd h o ii ic i coo. Did -

gi hd ixd q i o poc. co

w poii oh. Wh poiic d d o i

h i o h d cii, pic o i gd.

Mg hd hdgd g poio o hi hodig, which

copd i w wih h c, oh co-

qc w h og hodig did o p p w dig

h p ph. Dc w igic c oh,

wih g dic w g.

Th i xpcio o high cooidio cii i

o co, d o xpcio h ci ch-h

p wi o gic cqiiio. Sch

io i o poii o E Di gi,

h whi high dpd o h ci

o o hh. Difc piod h ocd

g o dc hi gig d c c hi poi-

io. W i i h h i good poi i

h g, h i i owh oo o ic

xpo.

mc d d

Th q o w coiio o h pii

h hid q, h i, wih jo dic w

io g. c, h pci g

iw o Eop w cci o poc. Th i o

h h wod w dig h hid q w -

od gi i No. A , i w -

o c c poiio owd -d, which d i

h od o dig Dc.

Viwd gop, CTA d Sic Mco dd h

gi. h gi, i h w jo di-

c w idiid g, dpdig o od

p d ocio. Td-oowig od i xd

ico w h po, d g wih g

h o hi o ocio i xd ico did ic. Thowih o xpo o d od, w ho

wih ci dig i coodii, pod gi

dig . Cc gi hd copicd d

o cc iio h Swi d Jp c

, which coid i h oh q w.

Mg i Eop h o ipo o wch

i h . Ahogh h iqidi iio h i-

pod, wih h hp o h ECB iid h o,

h c i h h x g go

o h wi d d wi d o cd i h

q o . Th oi odig Gc d co-

id gopoiic io i h Midd E hod c

iig oppoii o g, h wi d h

ii o c qic o i od o cc.

h i o Investment Outlook, w highighd how

CTA d Sic Mco oo o pooio dii-

cio. Th gi xpcd o po w wh

oh c hig difc. Thi i o dig

. Mg h icd hi xpo o d-

oowig od, which h d o g hodig o xd

ico cii. Coid wih hi gi poiio

i h o, hi gi h d h di chc-

iic h dii o pooio xpod o ocoio c. Mco d Tdig i o

choic og hdg d gi i h .


Hdg d

STRATEGY INDEX PERFORMANCE % (USD)

Jan 2012 Q4 2011 2010

gll d FX gll d Fud . 0.48 -. 5.19

qu d FX qu d . -. 19.08 8.92

l vlu FX l vlu . 0.10 4.00 7.65

D FX D . 0.56 4.90 1.98

mc FX mc . 1.96 4.88 1.73


27/35


Greater international interest in European

properties

Strained valuations in many primary markets

create attractive opportunities elsewhere

o i ci i i , wh ig

io , o d poi o h i o co-

oic d. o d i ci,

i h o w h i ic , h i o-

c id d p ig o whh io hod

i o i o i. ch ci, i i h

h h coio w di i co

og, which i i o difc o io oci dg o h diicio qii o

di c.

l d dc

Wh h oc dig h o , h

coodii d pi qi copi o p-

od w. Vio o idic i,

i id pop copi d i

(RET), chgd i i wih h go oc .

h d coid o h

h w o coo i w h go o dic

pop i.

Th w o i ochd h

c, d h gi ci ci chd

hi i h hid q. Bc o igh o qi,

dd i pi d pci o oph pop-

i d h xp o ii cod .

R d oo og o co, which w cd i

owh ow cii. Thi, i , d o ow xpc-

io o h oh q.

gw ll u

D idic h h oh q o d o

coid h xpcd. Spiig, h iggic i cii w i h coci pop i

Eop, wh cio o o pid d o g

iio i i h gio. Thi i ocd pi-

i o G, Fch, Nodic d E Eop pop-

i, whi oig io i i oh Eoppopi .

Ai, h o o coci pop cio

h dig h oh q o . Thi dci i ci-

i w o, how, icd o d, which od

cco o o p c o h o i h gio.

Ahogh o cii co dig , h c -

i h o hioic ppci h gio coi

o h high cii .

Acii i h US ,

ghd dig h oh o . h co-ci , cii w chgd, whi idi

w og ho h ghd. Looig

who, h US pod o o cii

dpoi.

Real estate market is still resilient

l

b XpCD Civiy DUig Q

0

10

20

30

40

50

60

70

80

90

100

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

Americas EMEA Asia Pacific

USDb

illion

The largest increase in activity in the direct commercial real

estate market occurred in Europe (part o EMEA), where transac-

tion volume rose rapidly due to increased international interest

in the less cris is-hit countries in the region. However, activity in

southern Europe is weighed down by the overhanging debt crisis

in the region.

Soc: Jo Lg L


28/35

29

l ld ll lc

Gogphic, id qi id g -

chgd i , xcp o piph coi

i Eop, wh h o. M p h id hiid qi i cii-hi Eop coi co-

qc o h oig i i h gio. h who, how-

, h o i id c i

ii i h ci w

xpicd dig h cod h o .

Fo o i, w h o dig d i di

g. Whi id qi i pi

d o oph popi h igic, id -

qi i ii cod h i. L i h

hid q o , how, h w ig o hi w

o h ow-i g o owh high i-ig dc h w o pp dig h oh q.

Yid h g i ig d (d o iig

pic o xiig popi) ic h pig o ,

hig pd i h w o h ci cii. Copd o

h piig o h cii o o i , h

i h oo o co, hogh h i w

ow xpicig i difc o ji dci o ho

. Th ci ii, which

h w wi d o coid ghig o h c-

ocooic ci (ch w h i h US dig -

c oh). Eop poiic d d oio

o h piig d po, ch g d o

pd p o i i i o w c

o o od, i ci. Wh, o h i

hi occ, h id qi i h

coi hi jo owd .

idc l h l qu

dic i h how i

poc dig h p ix oh, h pic h

o di o h idic (i - cop h d RET). Sic Ag , h RET

h copid h poc o h oc -

. o dig h p ix oh h o

ii h h di coio wih h wod oc

(MSC A Co Wod dx i oc cci) h c

od o p c. oh wod, o di i h

RET h od i h dicio h oc

i o o c. Dig hi piod, h

o idic, p o . p c. Fo pooio

dpoi, hi i hig di phoo,

ic h oppoi o dg o h diic-

io qii o di i o o iid.io h io o wh h dic d h

idic poig o di,

o o h dcii co i h iqidi pc o io

p o i.

wh c wd l

Sic , w h o o ood o h id-

i o h . A h g ci

h ipod i c oh, pc h o co

owh . Ahogh h pic i o i c,

p o i h io i pi

i id. A coqc o hi, o

ci i oppoii iig wh. W

icig o o iw o i-

owh o opiiic od h h

oh go.

R


The world, EPRA/NAREIT, Index (SEK) [perf %]

The world, MSCI All Countries Index, (SEK) [perf %] Source: Reuters EcoWin

Aug

2011

Sep Okt Nov Dec Jan

2012

-15.0

-12.5

-10.0

-7.5

-5.0

-2.5

0.0

2.5

5.0

Percent

-15.0

-12.5

-10.0

-7.5

-5.0

-2.5

0.0

2.5

5.0

iDiC L ivm

pFOmig Lik QUii

Since August 2011, the REIT market has nearly copied

the perormance o the stock market. From a portolio

standpoint, this is anything but a desirable phenom-

enon, since the opportunity to take advantage o the

diversication qualities o dierent assets is more or lesseliminated.


29/35

30

Continued nancial instability is causing listed

PE company market prices to move in tandem

with bank shares

...even though PE companies have stronger

nances, lower gearing and more stable prots

than beore the crisis...

...which, together with low valuations (large

discounts), indicates signicant potential ahead

c oh w h iiio i h wod

ci d good poc o ii

c. A gc, id pi qi (PE) copi o xcpio h h cid o ch h

od oc ic ooig o i co .

No, how, h igic h h h oc

i h pcdig dow ph. A i, h -

pic poc o PE copi i howig g ii-

i o h ci co, doid . Vio

i cii , wih dico o (NAV)

o - p c o id PE copi. o poii

cio, pi qi wi h og h po-

wi.

o opiio, od io o PE copi h cio. Th i w w i h icii o c

i h pig o h wod coo w i

dp cio whi high gd PE copi,

wih hi g pooio o copi ogh p -

io i h pcdig , d .

Tod, i o iw, h iio i di, ciig h

h i wog qi ig h d o poo.

Ad idd, h g i o o wh PE cop-

i hod dd wih g dico h . Aog

h :

Theriskofanewdeeprecession

Theriskofanancialmeltdown

Lowerreturnduetolowergrowth

Lowerreturnonequitygivenlowerleveraging

Disappointedinvestorsleavingtheassetclass(ightfrom

i)

L co xi h g, d hi c:

w d c wod oio h h hodig o

PE copi. cio o dciig NAV, h o

pooio copi qic, whi ow gowh ji

ow po ip NAV wi qic i ch cio.

B hi cio i o o i cio. i o ipo-

o o h pooio copi g i

hp h dig h - ch, wh o h

hd ogh dig gig cooic oo h

copi h cid i o o wo ic h.

fcl ldw, o xp o iggd o

cop, co d o. h ho , hi wod

d h ow o h PE co pci o i,

i dcd i ppi. Ui h ci cii, how-

, h co ci ii i good od. Th dg

o gig i g ow d h dio o d ig-

ic og, wih good diiio o ii.

h x w , o cio o h copi

d d. Thi o ci gh i o good h

h copi c wihd i og piod o

ci , gh ch wod po o h

jo ipc o go gowh. ch cio, PE wod

cd, o ci o h oh c-

o. How, w wod po igic ogh

cig iio hd, gi go ci po.

Mo difc d/o o xpi cig oio

hod o ji high dico o NAV, -

ig q o h oh hd, h ow i h

wod po p o hi cio wod h -

ci co g.

Mo o xpc h wh wll lw o

io h . Thi dc h poi o

g po ic i pooio copi d o ji

ggi io. B i i , copd oh od oc , PE copi hod id

o hi. A og h i gowh, ci owhip

p qu


Attractive purchase option on stabilisation


30/35

31

gd, coid wih high gig wh oowig,

wod cp o gig po gowh.

Th c h PE copi od high gdh dig h p o h Lh Boh ch

h poi u qu wll lw.

Thi ji owh ow io. h oh

hd, i ipi icd ci ii d ow i,

which p o hi c.

Fi, h i h io wll cll d h

cl ow dd i . So

p, ch Eop , i h poc o

widig dow hi PE poiio, d pi

qi h pio ch, d o i -

w PE d od good iow.

T ogh, h h g i o o ow

io d high dico h h hioic g.

B dico o NAV gig - p c icdig

copi wih good cdi picd h

hi xggd. W i h c-

io idic chd , d w o

h . Th co i i igic hp h -

o h pio cii. Th i g i o o h

iio ig h io idic :

Asignicantlylowerproportionofportfoliocompanies

ogh h p (-)Generallyhigheroperatingmargins

Highernancialresiliencevialongerdebtmaturities

Lowerdebt

W i h h do o ppci h

chg h h occd i hi co ic h pio

ch d i h wog pig ogh PE copi

wih ci i hi io. Th cci dic

h PE copi od, i , o dic

ipcd ci ci, g d wi-dow c. A h

i, h h ch g oppoii o g

ddd i hi hodig i ci owhip.

iio o hi occio ig id owd PE

copi i h i h cod h o , Apx P,

jo Eop PE cop, did p c o i

pooio o copi pic o p c high h

pod NAV. Mwhi h dico o pod NAV (o

icdig h did copi) icd o o

p c. Sic h d qi o h iig poo-

io copi i coidd h ho o h did

copi, od io i ho o .

Th ow io o ip oo, ic h op h

w o io p o -gig cio. L

oh g PE cop, SVG Cpi, ocd

pog o pch i ow h. A h i, i

dico o NAV w p c. A h cio,

h cop w dd dico o p c d h

h pic hd cid p c.

h o codi (xiig PE i i h

cod ), h dico g . Thi

c oppoii o id PE copi. Fo xp,

h c i i h codi high-

io h ppi o h id cop, which oo

i . Th ow dico o codi i o o

wh w p id copi.

Tod iio i chgig o PE copi. A p,

hi ooo i hpd do o h gh o

cooic gowh, copd wih hdicppd -

ci , pcic o-xi poi o o co-

pi i h oc d h iihood o ogh

cig ci hd. A og h iio , pic

o PE copi i o g. B i w hod

coiio o c iiio i o codiio wih

o cooic gowh d wih icig i p-

pi dig o io o PE copi c o hi

hioic g h pid poi i igic.

Ad i cio opiiic cio, ch o i

cio, pi qi h h c o og h wi-

. Th co o ci d pch opio

o gowh.


Pi qi

60

65

70

75

80

85

90

95

100

105

2011-05

-01

2011-06

-01

2011-07

-01

2011-08

-01

2011-09

-01

2011-10

-01

2011-11

-01

2011-12

-01

2012-01

-01

2012-02

-01

SEB Listed Private Equity S&P500 S&P Financials

SEB Listed Private Equity -19%

S&P 500 -3%

S&P Financials -12.5%

UJUiFibLy Wk pFOmC

During last autumns stock market reversal, private equity

companies ell more than the stock market as a whole, which in

itsel is not unreasonable. However, the slide was as large as or

the nancial sector generally, which seems to be an overreac-

tion since PE companies are not as clearly aected by nancial

problems. It is also worth noting that PE companies have risen

less than the Financials index (but more than the broad index)

during the recovery o recent months.

Soc: R Ecowi


31/35


Oil prices will remain at high levels

Chinese sot landing will benet industrialmetals

Normal weather means cheaper agricultural

commodities

A i ppi h d, d o h wod oc

h g wih hp iig h pic,

coodi h o pod og. di

, h o ccic dpd coodii, d

o wih do-digi pcg p i c,

w h o pic gi o pcio d o

gic coodii. i pic (B cd), which wih-

ood c w, h h-

o od igic dig .

Dl i l c

Th g i o o oh iig d ig oi

pic dig h coig . Dd gowh i ci i

igh o h cocooic io w i. Mwhi

oi podcio i iig i ch coi Li, q, h US,

Cd d Bzi. cd pp d ggig dd

wod ph dow oi pic. B i i woh oig h dpi

h c dowwd dj i ocd dd i

, h oc i w o dd (h EA oc i h ch). Th i o pp dipio

h o icd pci coqc o h po-

odig gd dop o c wp-

o, o h ogoig coic i Nigi d g -

ci i h Midd E d Noh Aic (MENA) gio.

ddiio, go oi oc ow (Eop ow

w h o ic ). h o pp

dipio, h i o hp oi pic ic i oio.

Aig h o xodi , which igh

c pp o pid, w i h PEC (Sdi

Ai) wi gd dj pp o dcd dd i

od o p oi pic o USD p (ic hi

i h h Sdi Ai d i od o chi -

cd go dg). dd od pc,

hi wi ho po o d o dic ig oi

pic.

p h ig pid i o oi pic. i coi-

ig o dop h cpii o id c wpo, whi

h US d Eop iodcig cio o pd

o chg i id. Uo i gogphic w

pcd o c hoc i h co d ogh o.

Thi i c coo h Si o Hoz, hogh

which p c o o oi cgo p d igh

( hoic) co i, wih hp iig oi pic

coqc. pcic, ch p wod po d

o d coic, cdi h o co h Si wod

po ogh o di oi pic o w cod .

Poidd h o xcpio occ, w i h

dig oi pic wi i high od od USD

p , d php owh high.

Continued price decline or agriculturalcommodities

Cd

gLObL OiL DmD i CLimbig vy y

82

83

84

85

86

87

88

89

90

91

92

Jan-09

Mar-09

May-09

Jul-09

Sep-09

Nov-09

Jan-10

Mar-10

May-10

Jul-10

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-11

Sep-11

Nov-11

Jan-12

2009

2010

2011

2012

Millionsofbarrelsperday

As the above International Energy Agency (IEA) orecast o oil de-

mand indicates, 2012 demand will exceed 2011 demand by about

a million barrels per day despite recent downward adjustments.

Soc: EA


32/35


Ch ld wll d l c

Wi idi pic i o dig ?

pc, hi i h hig ig whh h Chi

coo i cig o o hd dig. Thi i cChi cco o p c o h wod idi

copio. i cio i h Chi wi xpic

o dig, d i w igh h i poi o iig

idi pic. Th h o c ig

h ioc o pcpio h h wi o dig.

io i Chi h hp, whi GDP gowh h

iid high . di cii h o iid,

d Chi h i p i h o o dcd

qi o owd ooig i o-

poic. Fig ho pic i Chi i oc o

coc h dip hi pic o i o i.

Sic o pic, xpd h LME dx

( ch), h o p c ic hi

p, cio cio i d cd i od

pic. Fho, p o idi

ig dd hi gi podc co d h i o

hp ig pic iid.

Fo zic, high pp h dd h d o iig oc

d ig pic, ig i h wih h poi

o pic ic hd.

Di high id pp d dd iio, w

i h copp h h g poi o pic p.

Ui io oh , how, copp i dd w

o gi podcio co, which coq

h i wi po cd h o oh poii d

gi pi.

gld lw h

Pic o pcio dig h cod h o ,

og oh hig c h US do gd gid

gh. od i, god h hioic -g o io, i og do,

pci god poiio d ccd iqidi

wighd o hi h h pocio h god i gd-

d oig i i o g ci. A coqc,

god pic hogh woi icd. E i

, god pic o i. W i h h i ppo

o owh high god pic dig h . Excpio

ow i o og i o co, dcd iio

i d poi h o iio p-

po hi oc.

Dcd o iig god pic h cd ici oicd podcio. h p - , god o podc-

io h icd o h x god pic. Thi i

woio ig, ic god pic h hioic i o

wh h pp hd o gd.

W h cio opiiic iw o pcio dig

h o . W p god o i, d o ow oi-

i. Boh pdi d pi ci, h oh

p .

Fll culul cd c hd

Sic o gic coodii h

how ig pic d, d w xpc hi o coi.

Dogh i Soh Aic d o h L Ni wh ph-

oo poi poppd p pic i d

i , o xcpio wh codi-

io w xpc h iio o oi hi pig. Thi

ppo o oc o h d ow pic.

coodi h h poi o go gi hi d i

coo. Th diig oc hid hi ow oc co-

id wih og copiio o gic d, d h

c h dd h o cod ic .

h c wll d cd cDig h wi coid ipo i c-

ocooic iic o h US, oo o poic i

Chi d og- o h Eop C

B (ECB), which wi di coodi pic pwd.

Ecooic d o h US h c xcdd xpc-

io i c, d h coid dci i Chi

iio op h w o coci o poic.

A p i hi dicio occd i Dc wh Chi

owd h qi o . W wi po

h p i hi dicio, which wi poid ppo

o coodi pic. Th ECB dcii wi o gi h

o o o opiiic o h .

Coodii

vOLiL mL piC Ov p Fiv y

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Apr-00

Apr-01

Apr-02

Apr-03

Apr-04

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

London Metal Exchange Index

Ater large price upturns or metals during 2009 and 2010, prices

ell sharply during the second hal o 2011 but now seem to havestabilised.

Soc: R Ecowi


33/35


Further weakening o the euro is likely ahead

Financially strong currencies/countries will beavoured

The revaluation o the Chinese yuan will

continue

Th coci i ppi o io d o di

wh diig oc wi pdoi i h oig xchg

(FX) . Dig piod wh io ig i,

h iqidi o cci i h o ipo co.

Sch ci pid dig ch o , o-

ig jo cci wih h ch h US

do (USD), h Jp (JPY) d h Swi c (CHF).

Rc, how, o poii i h cp io

h , id piig og cocooic

iic o h US d c o gi pi o

h o zo. Th igg coio o h icd i

ppi, how, w dciio h Eop C

B (ECB) i Dc o i ood h Eop

ig co wih iqidi. A io h dd o

hi h, h h icd dd o c-

ci o coi h how d gh, o x-

p i o GDP gowh, go d d c

cco c. Cci h hi dcipio icdh Swdih o, h Nowgi o, coodi-d

cci i h Cdi do (CAD) d Ai do

(AUD) w o gig (EM) cci.

Fudl wll h c

Th wod coo i i i wi-d- od, d h

ci cii i Eop i hig c ipc o h

coo. Tod og- oio o h o zo cii

di, d poiic d o i o pi

h wod wih o cio. B hogh h poc i o

h wo-p-owd-d-o-p c p, Eop

poiic d oig i h igh dicio d ig

gd p owd dp cooio.

Th i o ic c o ic o zo coi,

h o h c ph i o. Thi wi gi i-

o hig pc d i o i hi gz d coidh poi o go cooic gowh.

Th i ci i owh . Aid o Chi

pp oidc o hd dig d h poi o h

US coo o gow dc pc, c chg o -

id i id og o c . Th h hid

hi gi d h ow g cd xpio-

o poici, h ig i ppi.

h i ci h w o, cci cd

og go c d c cco p

hod h coi o i dd. How, w i

o po cocio, ic dop i h o zo

cii wi o i i pdic. Thi h ch

cci h Nowgi o, h Swdih o d

h Ai do, ic h h ppcid hp i

ho piod d ii o cio i i ppi.

Demand or quality in the FX market

Cuc

ULi DOLL Ck OCk mk

AUD Index S&P 500 Index

Jul

2008

Oct Jan

2009

Apr Jul Oct Jan

2010

Apr Jul

S&P

500I

ndex

70

75

80

85

90

95

100

105

110

AUDN

EER

,Index

600

700

800

900

1000

1100

1200

1300

1400

In the FX market there are various currencies that are cyclical

and move in tandem with the stock market. The Australian dollar

is the clearest example, but the Swedish krona and the South

Korean won are also aected by shiting market risk appetite.

Soc: R Ecowi


34/35

35

gl u w hd

Th o hi dd cc pi i h FX i

h o gi h US do, d h o o h

EUR/USD xchg g c wod oc

d. Wh i ppi dc, h oc

d io d o do, cig h EUR/USD

o . Sic Dc , how, hi p h

ipd d h o h o god gi h do-

h i h oc h od pwd.

xpio i h i ppi i o og o co

cocd o h odig i h o zo. Bc

o h goo ooo o oh Eop, h o i d-

ig ow d ow, whi h c o gi w o h

o zo i ogh o p i ppi p. i h -

o g wig o h o, o io igh o

h iqid US do.

Th o h wd igic i c oh, d

hogh hi wig ow o h pd, h

dowwd d i i o coi. A i og-

oio o h o zo po i di, d h

cooi o o oh Eop coi ig

o h i. SEB oc i h h EUR/USD xchg

wi d . ( p o .). W

xpc h o o o dowwd owd . gi h

Swdih o (c .).

Th do dig piod o iid woi o

h EUR, h USD h o ppcid o i ow i.

Acii i h US coo h xpcd high, wih

poii ig o oh h Aic o d hoig

. Whi h US coo cc, h Nodic co-

oi wi dc dig . Thi i wh w xpc h

USD/SEK xchg o ppci dig h cod q-

o o . p Swdih o (od o .) d

h USD/NK o ppci o . (od o .).

mxd cu m cuc

D o hi cocio o h o zo, h ooo

o E (icdig C) Eop cci do o

oo o igh. So coi i h gio o h d-

w. Hg h g pic co d,

i Roi h co i o Gc d T, d

c cco dci ig od i Pod. co,

h ooo o Li Aic cci i igic

igh. Nio c g og, d -

whi w pdic h pic o pcio d idi

wi ci dig h coig .

W o h Ai cci h h ooo.

c, Ai cooic d x

og, wih pid gowh, oo c cco p-

d ow c go d. High od id co-pd o h ECD coi o c oig cpi

d hp di h xchg o Ai cci.

Sog Ai cci c o jid poiic. Ai,

d Chi, wod i o ic doic copio

d co xpo-dpd. Mwhi idd

hohod i h W d o dc hi copio d

W coi id d o oo hi xpo.

oo o dig od piig ic i og

Ai cci, which wi ipo chp i oc

d W xpo.

Fo o h , h Chi hoii h owd

gd ghig o h (CNY). Thi ppciio

wi coi, h pc o io i i o ow

h pio. Th o i h h owdow i go d-

d i pig dow Chi xpo gowh d h iio

p i Chi h d i c oh. W xpc h

USD/CNY xchg o d . i Dc

(h CNY i dig od . od).


Cci


Jan2011

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2012

Feb6.25

6.30

6.35

6.40

6.45

6.50

6.55

6.60

6.65

USD/CNY

6.25

6.30

6.35

6.40

6.45

6.50

6.55

6.60

6.65USD/CNY (onshore)

USD/CNH (offshore)

yU vLUiO WiLL COiU

The Chinese authorities have gradually revalued the

yuan (CNY) against the USD. The pace o yuan ap-

preciation has slowed somewhat due to lower infation,

fagging export growth and a generally stronger dollar.

We oresee a USD/CNY exchange rate o around 6.00

at the end o 2012. The chart also shows Chinas mirror

currency, the CNH, which oreign investors can buy.


35/35

SEB is a North European nancial group serving 400,000 corporate customers and institutions and

more than ve million private individuals. One area with strong traditions in the SEB Group is private

banking. From its ounding in 1856, SEB oered nancial services to wealthy private individuals.Today the Group has a leading position in Sweden and a strong presence in the other Nordic coun-

tries and elsewhere in Europe.

SEB Private Banking has a broad client base that includes corporate executives, business owners and

private individuals o varying means, each with dierent levels o interest in economic issues. To SEB,

private banking is all about oering a broad range o high-quality services in the nancial eld tai-

lo

SEB report: Hopeful start to the investor year

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Transcript of SEB report: Hopeful start to the investor year