Before making any final investment decisions, please read the prospectus, its Annual Report, and the KID of the relevant Sub-Fund here
Likviditetsstrategi advanced by 0.06% during June. Since year-end, the NAV per share has consequently increased by 2.19%. The month was characterized by increased geopolitical uncertainty in connection with the Wagner uprising in Russia. The interruption of the uprising calmed the markets, at least in the short term. What the longer-term effects will be is at the time of writing highly uncertain.
Otherwise, monetary policy and rhetoric from the world's central banks continue to characterise risk appetite in the financial markets. With the exception of AI-related tech companies, there have been moderate movements on the world's stock exchanges and credit spreads have moved more or less sideways during the month. Long-term market interest rates remain more or less at the same levels as at the beginning of the year. Even though inflation has peaked and is now falling relatively quickly, the hawkish rhetoric from central banks continues. The fall in inflation is mainly due to falling energy prices and smaller increases in food prices. Pandemic effects such as disruptions in global supply chains are virtually completely gone and freight rates are back at levels prevailing for the pandemic. However, the labour market continues to be strong, mainly driven by a strong service sector. All in all, this means that the economy is stronger than expected and even if we are close to a peak, there may be more hikes before it is time to discern any interest rate cuts.
In the Nordic region, there has been high activity on new issues for both investment grade companies and for companies with lower credit quality. The challenges for many Swedish real estate companies will persist as long as we have the interest rates we have. Given large bond maturities in the coming years and falling property prices, most companies need to increase the pace of property sales and share issues to strengthen liquidity and balance sheets. That said, a negative scenario is largely priced into bond prices and for long-term investors there are also opportunistic investment prospects.
The conglomerate Storskogen was among the month's major contributors, after tendering its 2024 bond following a successfull issuance of a new four-year bonds. In connection with the issue, S&P confirmed Storskogen's credit rating, although continuing with a negative outlook due to an expected weaning business cycle that may lead to worsening key figures. Norwegian IT consultant Crayon also made a significant contribution to the month's results after a competitor to the company received a bid to be bought out from the stock exchange. Media reports then claimed that Crayon was also exploring strategic options, including a potential sale of the company.
Bonds from real estate companies developed weakly this month as well, with negative contributions from, among others, Heimstaden and Samhällsbyggnadbolaget i Norden. Heimstaden came under pressure on concerns that interest rates will remain "higher for a longer period". In such a scenario, the valuation of low-yield residential properties could come under serious pressure, which in the long run would force companies like Heimstaden to reduce their indebtedness significantly. SBB was downgraded a further two notches by S&P and thus has a BB- rating. At the end of the month, SBB announced that exclusive discussions had begun to sell the remaining 51% of EduCo to its partner Brookfield. The deal is expected to be completed in July. If the transaction is successful, it would likely result in a much-needed cash inflow for SBB, reducing the refinancing risk related to maturing bonds in 2023/24.
During the month, the fund participated in the new issue from Storskogen and bonds from Tele2 were added to the portfolio. Bond from Klarna Bank and Stolt-Nielsen matured and both companies thus left the portfolio.
Portfolio Manager of Coeli Likviditetsstrategi
Portfolio Manager of Coeli Likviditetsstrategi
| Inception Date | 2010-05-01 |
| Management Fee | 0 % |
| Performance Fee | Yes |
| Risk category | 2 of 7 |
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Before making any final investment decisions, please refer to the prospectus of Coeli SICAV I, its Annual Report, and the KID of the relevant Sub-Fund. Relevant information documents are available in English at coeli.com. A summary of investor rights will be available at https://coeli.com/regulatory-information-coeli-asset-management-ab/.
Past performance is not a guarantee of future returns. The price of the investment may go up or down and an investor may not get back the amount originally invested.