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The Swedish equity market went up 32% in 1997 in local currency terms, underperforming the FT Europe ex-UK Index by 11% in sterling terms. The key factor behind this was the Asian crisis. The Swedish OMX index is largely made up of cyclical capital goods and industrial stocks. Among the worst hit stocks were pulp and paper companies Stora and Modo, both of which lost 25%.
"Ironically, the Swedish market is suffering from international exposure. Companies are faced with worries over exports to Asia and cheaper import penetration. This is a bit of a hiccup but the market will recover in due course," says Jamie Sandison, European equities fund...