Low prices of Finnish industrial shares lure bargain hunters
Small investors gobble up stock abandoned by foreign investors
|
|
|
Small investors in Finland have become increasingly interested in buying shares of Finnish industrial companies, especially now that shares are available at bargain prices.
The falling prices have led foreign investors to sell off many of their Finnish holdings.
For instance, the proportion of Finnish owners of the technology company Metso has grown in one year by nine percentage points to 15.5 per cent.
The number of individual shareholders has risen since last year by 22,000 to about 47,000.
The proportion of Finnish ownership could soon exceed that of foreign ownership. The proportion of Finnish institutions, companies, and associations grew in one year by four percentage points.
The proportion of private investors in the chemicals manufacturer Kemira has increased by about five percentage points within just over a year to more than 13 per cent.
The metal components company Rautaruukki saw a 4.5 point increase in ownership by private households to 14 per cent of all of its shares. The number of individual shareholders rose from 14,000 to nearly 37,000.
A clear turning point in the decline in foreign ownership, and in the growth of private domestic ownership took place in Metso between late September and late October last year.
In late September, foreign shareholders still held 65.5 per cent of Metso’s shares. In late October it was just 58.3 per cent. Finnish small investors had 7.9 per cent of shares in late September, and 11 per cent in late October.
Metso CEO Jorma Eloranta believes that many foreign shareholders are forced to sell their shares under their own rules. When viewed from London or New York, Finland is easily seen as a peripheral area from where it is easy to reduce shareholdings.
“Those who want to buy are largely Finnish investors. People’s capitalism has increased considerably, owing to the recession”, Eloranta says.
At the steel manufacturer Outokumpu, the proportion of ownership by private individuals has increased by more than two percentage points in a year, to 9.5 per cent. The number of households owning Outokumpu shares rose from 6,000 to nearly 24,000.
“Foreign ownership with us is declining sharply. Now it appears to be 31 per cent, when it was once well over 40 per cent”, says Ingela Ulfves, the Outokumpu director responsible for investor relations.
Ulfves says that a rising proportion of domestic ownership is a phenomenon that coincides with uncertainty on the market.
“Investors stay on their home turf, which they are more familiar with”, she says.
Pension companies are traditionally among the big Finnish investors. Risto Murto, head of investment for the work pension company Varma, has also made note of the growth in the number of private investors.
“Some corporate directors have noted that they now have many more private owners.”
Murto agrees that the importance of Finnish investors is emphasised in times of crisis.
Those who have observed the stock market for a longer time have also made note of the sharp decline of share prices. “The people have kept an eye on share prices. Private individuals do not sell shares, but are ready to buy when prices come down”, Murto says.
Helsingin Sanomat
|
| 2.4.2009 - TODAY |
 Low prices of Finnish industrial shares lure bargain hunters |
|
