Phones and forests lift share prices
Continuing his look at stock markets around the world, Liam Robb sees opportunities in Finland and France
Wednesday 29 January 1997
Although informal securities trading has taken place in since the 1880s, the Helsinki Stock Exchange was not founded until 1912.
The boom arrived in the 1980s when GDP expanded at 4 per cent year, but then departed abruptly in 1990 with the collapse of the former Soviet Union, which accounted for nearly 30 per cent of Finnish exports.
Only now is the country beginning to emerge from its worst recession in 60 years - and it has been quick to make up for lost time. Over the past 12 months, the 90 listed stocks have shown returns approaching 30 per cent, much of the outperformance attributable to the revival in the fortunes of the telecoms company, Nokia, which accounts for 35 per cent of the market's capitalisation.
Although inflation, at 2 per cent, is under control, 20 per cent of the five million population are unemployed - the highest level in Western Europe. Accordingly, the government has run up an unacceptably large debt. However, export and manufacturing output is increasing (forestry accounts for 50 per cent of exports) and the floating of the currency - the markka - has improved corporate competitiveness.
Aside from Nokia, Philip Mottram, head of the European desk at Abtrust, has high hopes for the cyclical stocks, particularly retailers such as Amer, the sports goods company which has bought the Wilson and McGregor golf club brand names. Enso, one of the largest paper pulp producers in the world, and Sampo, the insurance company, which should benefit from the Europe-wide move towards privately funded schemes, are also on the buy-list.
"The whole market is trading at only about 12 times earnings - relatively cheap by European standards," he says.
It has been a strange year for French equities. The main index - the CAC 40 - struggled for breath against a tide of dismal corporate results in the first half and then, despite the gloomy economic data, rallied strongly in the second. Indeed only last week the index reached an all- time high.
The economic picture, however, is bleak. Despite a recent cut, domestic interest rates remain relatively high, investment is low, unemployment is 13 per cent and the ensuing lack of consumer spending has done nothing to raise investor confidence; GDP growth for past year was a miserly 1 per cent.
Proposals for the 1997 budget are based on the need to reduce public expenditure and to meet the convergence criteria for monetary union.
As in Germany, the French stock market has traditionally been starved of long-term domestic capital, the population preferring the equivalent of deposit accounts.
Why, then, has the market returned something approaching 25 per cent over the past 12 months?
"Equity markets tend to discount what's going to happen in the future and people are buying the 1997 story," explains Brian Allworthy, European strategist for Merrill Lynch. "We just need to await the earnings results later in the year to see whether their valuations have been justified."
This "story" has much to do with the advent of private pension funds and the recent decision by the National Assembly to prevent such funds from investing more than 65 per cent of their money in fixed-interest instruments.
There are 701 domestic and 194 foreign companies listed on the Paris Bourse. Elf Aquitaine and Total, the petroleum companies, Carrefour, the grocery retailer, and the cosmetics giant L'Oreal are among the largest.
Merrill Lynch is particularly bullish on growth stocks such as Carrefour and the financials - banks such as Paribas and Banque Nationale de Paris.
Michelin, the tyre manufacturer, and Canal Plus, the television company, should also outperform. Because of the "save, don't spend" mentality, cyclical stocks like Renault and Peugeot, which rely on retail demand, are to be avoided.
The most important story for 1977, however, will be the privatisation in April of a 40 per cent stake in France Telecom, which should raise pounds 3bnn
Performance statistics: Datastream.
Most European sector unit and investment trusts have exposure to (3 per cent is the benchmark, although Abtrust's European unit trust currently has a larger weighting). France-specific funds include Invesco's French Growth Fund and the Paribas French investment trust.
Budget 2015: George Osborne is set to get tough with further cuts in public spending
Five Questions On: GB Energy's new tariff
Simon Read: 'Taylor Swift tickets purchased on Viagogo were cancelled hours before the concert'
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Bank-beating exchange rates on your international payments
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 3 Number of young homeless people in Britain is 'more than three times the official figures'
- 4 Motorists taunt suicidal woman on bridge and tell her to 'get on with it'
- 5 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
Day In a Page
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.