Likviditetsstrategi advanced during September with 0.10 percent. Since year-end, the NAV per share has consequently increased by 1.91 percent. Risk appetite in the financial markets fell in September due to increased uncertainty about the strength of the global economy, which led to generally falling stock prices and moderately rising credit spreads. The corporate bond market was also pressured by rising government bond yields.
The largest contributor of the month was the ship leasing company Ocean Yield, during the month an infrastructure fund under management of KKR presented a recommended bid for the company. The change of ownership is not expected to entail any extensive change in strategy for the company, the dividend level is expected to be somewhat lower in the future in favour of investments in the business.
The acquisition conglomerate Storskogen also made a positive contribution after announcing that the company will be listed on Nasdaq Stockholm in October. The real estate company NP3 Fastigheter also developed well on news about the acquisition of properties and issuance of both preference shares and bonds.
On the negative side one mainly found covered mortgage bonds, which fell marginally in value as a result of rising market interest rates. Bonds from Heimstaden AB also fell in value after its subsidiary Heimstaden Bostad announced a very large acquisition of residential properties containing almost 29,000 apartments. The transaction means that the company's financial key figures weaken, mainly regarding an increased loan-to-value ratio. With the acquisition, Heimstaden Bostad establishes itself as one of Europe's leading players in rental housing and the exposure to markets with rental regulation increases, which provides improved stability and predictability for the company's earnings. Heimstaden AB received after the transaction was announced for the first time a public rating from Fitch which landed on BB +.
During the month, a new investment was made in a green bond from the real estate company Odd Molly (under name change to Logistea) which focuses on warehouses and logistics properties in southern and western Sweden. In the real estate sector, Pandox and Platzer were also added to the portfolio through investments in commercial papers. A few additional investments were made in bonds from Intrum and Crayon Group, among others. Balder and Magnolia Bostad left the portfolio.
The Federal Reserve (Fed) left the Funds Rate unchanged in the range of 0.0 - 0.25 percent, during this month's FOMC meeting. As in the previous month, Fed communicated that a slowdown in asset purchases is approaching. The announcement of tapering is expected to come during the next FOMC meeting, given that inflation and employment targets continue to move in the right direction. The number of new employees increased by 235,000 in the US economy during the month, which was far below market expectations of 750,000. Unemployment fell by 0.2 percentage points compared to the previous month and now amounts to 5.2 percent.
China's second-largest real estate developer Evergrande shook the global financial markets during the month when the company’s acute liquidity situation became clear. The rating agency Moody's downgraded the company's credit rating during the month with continued negative prospects. There are still unanswered questions how the company will be structured going forward so the story is likely to be continued.
As expected, the European Central Bank (ECB) left both the key interest rate and the purchase program unchanged. The ECB also adjusted inflation forecast for 2021 to 2.2 percent from previous 1.7 percent and 2022 to 1.7 from previous 1.5 percent.
From Swedish perspective came the good news that the Government, together with the public health authority, eased most of the corona restrictions at the end of the month, among them the participation ceiling for public and private gatherings was removed, and the advice of remote work was abolished. A big step on the way to a more normal everyday life in other words.
During the month, the European and Nordic credit markets showed widening credit spreads in both the high-yield segment and the investment-grade segment. Stibor 3-months was noted at -0.06 percent. The Swedish ten-year government bond was quoted at the end of the month at 0.38 percent and has thus increased by 21 basis points during the month. The US ten-year government bond was quoted at the end of the month at 1.52 percent, 22 basis points higher than at the end of the previous month.
Portfolio Manager of Coeli Likviditetsstrategi
Senior Analyst
| Inception Date | 2010-05-01 |
| Management Fee | 0 % |
| Performance Fee | Yes |
| Risk category | 2 of 7 |
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