Newsletter week 22
This week`s headlines
• Mario Draghi Urges Economic Overhaul in EU
• BOJ Refrains from Boosting Stimulus After Growth Picks Up
• Interfox Resources Reports Positive Result Despite No Revenue
• Latvian Forest Decreased Sales and Profit in Q1
• S&P 500 has after a rectangle formation was formed made a breakout through its resistance at 2116
• HomeMaid is in a rising trend and has just managed to break through the support at 9,25
SEK
Active Managed Funds Versus the Index
Writers
During the last years, and also most recent months,
media has been flooded with news and articles
about actively managed funds versus their benchmark index. The goal for an actively managed fund
is to try and outperform their benchmark and peer
group average with the help and expertise from a
management team. For an index on the other hand
this really is just what it is, meaning that it is consisting of all of the securities in that specific benchmark. If you are to buy into an index, the strategy
becomes to hold all of the securities in that benchmark. Once bought, there will be no alternation
of any securities because an index can’t be actively
managed in any way. This is really the basic difference of the mechanism between an actively managed fund and an index. But there is also something
else that differentiates the two which media, investors and also the government has been raising their
voice over: the fees. It really goes without saying
that if you want to buy an actively managed fund
which purpose is to try and outperform its benchmark with the help of experts, it’s going to be a certain fee for this. At first this all sounds fair enough.
But what if history later shows us that these actively
managed funds in a vast has failed to outperform
the market? Of course there can be no guarantees
that they will outperform but one thing that is
guaranteed are the fees. Still, this becomes relevant
first when you compare to how the benchmark index that has no management fees has performed.
And you see, many actively managed funds have
a weak track record compared to their benchmark
index and you therefore have to ask yourself: why
should I pay for making less money then I could
have made for free? I’m not saying that you should
just throw all actively managed funds out the window, but rather sit down and think about what you
are willing to bet on. Are you willing to bet that
the actively managed funds will outperform their
benchmark index every year?
Carl Hemmingson
Small cap, Macro events and Spot prices
Oscar Dahlblom
Small cap, Macro events and Spot prices
Aram Olvbo
Macro: The Americas, Europe
Elina Tolstova
Macro: Middle East and Africa
Mu Chuang
Macro: Asia and the Pacific
Lejla Garibovic
Macro: Sweden
Patrik Olofsson
Active Managed Funds Versus the Index
Simon Skålberg
Technical analysis
Marcus Östman
Technical analysis
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Macro
lus policies have provided governments with a window to make these types of changes.
SWEDEN
Swedish Banks Fined Over Careless Anti-money
Laundry Controls
Nordea and Handelsbanken, the leading banks in
Sweden, were fined over their slacked anti-money
laundering controls. They were heavily criticized,
especially considering that they are Sweden’s biggest banks and have reputations of being the best
lenders in Europe. Per Håkansson, the FSA’s chief
legal counsel mentioned that: “They weren’t even
aware that they have had high-risk customers.”
The FSA said that more SEK 100bn is laundered in
Sweden each year and that banks must be aware of
the illegal activity and have better control on customers and transactions.
THE AMERICAS
US Homebuilding Data
To volume of US homebuilding reached its highest
level according to US Census Bureau and also said
that it increased by 20.2 percent, the highest percentage increase since 1991. The better than expected increase offers some comfort to the US economy
as previous economy data has not been as strong as
the FED wanted, inducing economists to trim GDP
estimates and pushing back expectations for when
the Federal Reserve will raise interest rates.
Asian Nation Tries to Deepen Ties with Latin America
Despite economic slowdown, Chinese Premier Li
Keqiang unveiled billions of dollars in financing and
trade agreements for Brazil’s biggest companies,
part of a broader effort to deepen ties with the region despite an economic slowdown. The investments are largely aimed at strengthening Brazil’s
infrastructure and at helping the commodity-dependent nation weather lower prices for metals,
crude oil and other commodities.
EUROPE
German Growth Slip
The Eurozone’s biggest economy showed a cloudy
outlook as German economic growth slowed in the
first quarter and companies scaled back their business expectations in May, according to data published. This was somewhat expected due to the fact
that Germany´s trading partners such as USA, China
and Russia are weak in addition to the sluggish investment spending and production. Domestic demand propelled activity in the first quarter, as both
private consumption and investment spending increased. But sluggish exports and falling inventories
meant growth fell short.
ASIA AND THE PACIFIC
BOJ Refrains from Boosting Stimulus After Growth
Picks Up
The Bank of Japan refrained from increasing monetary stimulus and signalled a more optimistic view
on the economy, as Governor Haruhiko Kuroda bets
on stronger growth to fuel inflation. As most economists forecasted, BOJ will continue to boost the
monetary base at an annual pace of 80 trillion yen
($662 billion), equivalent to 16% of Japan’s economy, it said in a statement on Friday. The BOJ Governor also gave the green light for stocks to keep
climbing Friday, saying the upward momentum is
fuelled by record-breaking profits, after the market
value of Tokyo shares topped its 1980s bubble-era
peak.
Mario Draghi Urges Economic Overhaul in EU
Faced with a weak growth outlook and inflation rates far below the ECB’s target near 2%, the bank in
January announced a bond purchase program totalling over €1 trillion ($1.11 trillion). The program,
which is planned to end September 2016, will maybe if inflation fails to raise enough, proceed for a
longer time. ECB President Mario Draghi said in a
speech aimed at the political leaders to use the recovery brought on by the ECB’s stimulus to reform
labour markets and make economic flexibility “part
of our common DNA.” Further that the ECB’s stimu-
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Macro
Aussie Weakens as RBA Signals Room to Further
Cut Rates
The Reserve Bank of Australia left open the possibility it might cut interest rates further, minutes from
its May 5 meeting showed, triggering a slump in
the Australian dollar on Tuesday. The RBA said the
lack of guidance at its meeting this month doesn’t
limit the scope for further rate moves, in the minutes released Tuesday of its May 5 gathering. The
Aussie further weakened as weaker-than-expected
HSBC flash China May manufacturing PMI came in
on Wednesday.
SPOT PRICES and one week change
OMXS30 1 648, 46 +1,98 %
NASDAQ 100
5 089, 36 +0,81 %
S&P – 500 2 126, 06 +0,16%
DAX 30
11 881, 81 +3,21 %
NIKKEI
20 264, 41 +2,69 %
HANG SENG
27 992, 32 +0,63 %
Gold spot
1 203, 95 -1,63 %
Crude Oil (Brent) 66, 30 -0,53 %
USD/SEK
8, 39 +2,43 %
EUR/USD
1, 10 -3.81 %
MIDDLE EAST & AFRICA
Egypt Postpones Capital Gains Tax for 2 years
Egypt froze its plans to introduce 10% tax on capital
gains, while keeping the tax on dividends. Previously the Cairo bourse was exempt from both types of
taxes. While this decision was aimed to attract investors, it was considered as socially unfair and was
criticized as transferring the tax burden towards
less wealthy people. Egypt’s government struggles
to raise money to cover one of the biggest budget
deficits in the Middle East. The decision to delay
the tax surprised the market; the Cairo index surged abruptly experiencing the largest daily gain in
22 months just after reaching five-month low the
last week.
MACRO EVENTS WEEK 22
Monday: Singapore CPI, New Zeeland Trade
Balance
Tuesday: Switzerland Employment Level, US Core
Durable Goods Orders, US CB Consumer Confidence, US New Home Sales
Wednesday: US Services PMI, Canada Interest Rate
Decision, Japan Retail Sales
Thursday: Spanish GDP, Great Britain GDP, US Pending Home Sales, Japan Industrial Production
Friday: German Retail Sales, Sweden GDP, Great
Britain GDP, Italian CPI, Brazil GDP, US GDP
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Small Cap
United Media Has Changed Its Name To PlayHippo
United Media Sweden AB has changed its company
name to PlayHippo AB. The company acquired the
brand name PlayHippo.com in April this year. PlayHippo operates in online bingo and casino games
through its Maltese subsidiary and has more than
350 000 registered costumers. PlayHippo is listed on
AktieTorget under its new short name PLAY.
Envirologic Has Started Savings Program
Envirologic has started a savings program in order to
meet the cautious market. This means that the sales
organization will be switched to be more commission
based. In addition, an investigation has been initiated
to determine the events in January that led to that
the company didn’t have an authorized board. Furthermore, the company’s management believes that
the fund in enough to prepare the next generation of
robot and launch it on the market.
Interfox Resources Reports Positive Result Despite
No Revenue
Interfox Resourses has published its interim report
for the first quarter. The revenues amounted to zero,
the same as last year. EBIT for the period amounted
to SEK 2 086 (-3 960) thousand, which includes income from investments and loans of SEK 4.0 million
(0). Operating income was SEK -1.5 million (-3.6). The
company also reports that it, in collaboration with
the authorities, has decided to start the drilling of its
new well in Siberia during the first quarter of 2016,
with the majority of the preparation finished in the
fall of 2015.
Analyst Group’s analysis of Envirologic http://analystgroup.se/envirologic/
Analyst Group’s analysis of Interfox Resources
Analyst Group’s analysis of Recyctec
Latvian Forest Decreased Sales and Profit in Q1
Forestry company Latvian Forest reduced sales and
profit in the first quarter 2015. Sales amounted to
EUR 126.3 (171.1) thousand. Profit after tax amounted to EUR 235.3 (271.7) thousand. During the period,
the company harvested a total of 5,800 cubic meters.
Felling generated an average net income of around
22.2 euros per cubic meter. Plan was to harvest 15,000
cubic meters, but harvesting is postponed because of
a weak market during the period. The intension is to
harvest the remaining volumes later in the year.
Parans Receives Order Worth 260 000 SEK
Parans develops and markets an innovative system
to capture the sun’s rays and directs the sunlight into
buildings. Parans Solar Lightning has received an order for a showroom in Tokyo. The order is worth approximately 260 000 SEK and is part of a larger marketing effort form its Japanese reseller Inventure.
Recyctec Made a Loss of 3,2 MSEK in Q1
The company increased their loss in the first quarter
in this year. Their net sales increased to 85 000 SEK
(75 000) and their total operating revenues amounted to 162 000 SEK (203 000). Profit before tax and
net profit was -3,2 MSEK (-1,5), which is equivalent to
-0,23 per share. The company maintains its target to
reach break-even in the end of 2015.
Analyst Group’s analysis of Latvian Forest
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Technical Analysis
OMXS30 has continued to recover further
this week and just broke through the resistance at 1639. MACD just broke through the
signal line from below which gives a positive
signal for the index to continue upwards.
All of this makes us technically positive to
OMXS30 and we believe the index will continue upwards in the short run. However
the risk exists that there will be a correction
downwards in the short run when the index
is closing in on the strong resistance level at
1660. The support levels are at 1639, 1582
and 1479 a bit further down. Our suggested
stop loss is to be set around 1550.
OMXS30
Click on the graph to enlarge it
S&P 500 has after a rectangle formation was
formed made a breakout through its resistance at 2116 and closed last week at 2126.
While this outbreak occurred, we saw the
MACD line cross the signal line from underneath. We are already seeing signs that the
MACD line is about to turn direction again
and we do not expect the index to soar, according to MACD. Stop loss is suggested at
2080 in the short term and 2050 in the longer term. We are technically positive about
S&P 500.
S&P 500
Click on the graph to enlarge it
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Technical Analysis
Sino Agro Food (SIAF) has skyrocketed upwards through the ceiling of the trend
channel the last couple of weeks, but last
week it turned downwards a bit and closed
at 16,30 USD. MACD has gone upwards in
connection with the share price movement,
but now it seems like the indicator begins to
slow down and by the looks of it, soon to be
crossing the signal line from above. This can
be interpreted as a weaker future growth
rate, and if MACD would cross we would
get an indication of a future downward
correction. The supports are at 15,10 USD
and 12,7 USD, and we recommend setting a
stop loss at 14,60 USD and 12,30 USD. As of
now we are still technically positive to SIAF.
Sino Agro Food
Click on the graph to enlarge it
Medcap has after a double-bottom formation turned its falling trend into a rising one
and found a top at 3,05 SEK. The price then
rebounded down to find support at 2,65
SEK where the stock is traded today. What
makes Medcap interesting today is that the
MACD line looks to turn upward again which
could be a sign that we will see it cross the
signal line from underneath. This could be
a sign that the stock is ready to continue its
positive trend and maybe try its resistance
at 3,05 SEK. The volume today is not as high
as during the first rise. Stop loss is suggested if the stock makes an established break
through the support at 2,65 SEK where the
stock today is traded. We are technically
positive about Medcap.
Medcap
Click on the graph to enlarge it
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Technical Analysis
Catella B has broken through the floor of
its middle term trend channel and found a
low at 15,90 SEK. We have also noticed a
double-top formation that was followed by
a false break downwards, and after hitting
15,90 SEK the stock rebounded. Last week,
the stock closed right above its resistance
at 17,20 SEK. The MACD line has crossed
the signal line from underneath which can
be a sign that the stock is about to make an
established breakout through its resistance
at 17,20 SEK. In addition, in association
with the rebound we have seen high volumes of trade that strengthens our belief
that the stock is about to break through the
above-mentioned resistance. Closest support is found at 16,20 SEK, which is also our
short term stop loss. In a longer view our
stop loss is at 15,20 SEK. We are technically
positive about Catella B.
Catella B
Click on the graph to enlarge it
HomeMaid is in a rising trend and has just
managed to break through the support
at 9,25 SEK. MACD has turned down and
seems to be about to cross the signal line
from above, which would give a negative
signal. The support levels are at 9,25 SEK,
8,50 SEK 7,50 SEK as well as at the floor
of the trend channel. We suggest setting
a stop loss around 9,10 SEK. Volume tops
and bottoms are matched well by the tops
and bottoms of the stock, which strengthen
the stock in the short run. We are as of now
positive to HomeMaid in both the short run
and medium run.
HomeMaid
Click on the graph to enlarge it
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