The economy of Sweden: a rough road leads to the stars
In the 19th century, the economy of Sweden evolved from agriculture to industry, transforming Sweden into an urbanised nation. By the 1930s, the country had one of the highest standards of living worldwide. During both world wars, Sweden took a neutral position, benefiting from subsequent post-war booms.
Unfortunately, prosperity wasn’t long-lasting. In the 1980s, the economy of Sweden suffered from high inflation and low growth, with the Swedish krona repeatedly devalued. These problems led to an economic crisis in the early 1990s. Banks became unstable, the national debt soared and unemployment rose sharply. It seemed like nothing could save the drowning country.
However, in the late 1990s, the government eventually managed to overcome the troubles following inventive and courageous reforms, and the crisis drew to a close. The country has transformed its economy, paving the way for robust growth in the face of global economic haziness. Ever since then, Sweden's economy has grown to become one of the most competitive in the world, with low inflation and strong GDP growth prospects.
Today, Sweden can boast of its developed export-oriented economy, featuring a modern distribution system, superior internal and external communications and a highly skilled labour force. The main industries include industrial machines, motor vehicles, telecommunications, pharmaceuticals, chemical goods, home goods and appliances, forestry and precision equipment.
In addition to maintaining competitiveness in manufacturing, growth in modern service sectors, such as information and communications technology, has been strong in the past decades. The country is known for producing a number of tech unicorns, including video call platform Skype, fintech company Klarna, music streaming service Spotify and video game developers King and Mojang.
Sweden has achieved a high standard of living, with its GDP per capita among the highest in the EU.
International investors and traders are interested in Sweden for numerous reasons. The country is a global leader in innovation with a stable economy, smooth business procedures, openness to international investments, a highly skilled labour force and sophisticated consumers.
According to Bloomberg’s Innovation Index, Sweden is ranked second, following South Korea in terms of innovation. The country has made great progress in encouraging the uptake of the latest digital technologies to enhance productivity and innovation.
What is Nasdaq Nordic?
Nasdaq Nordic is a part of Nasdaq, Inc. subsidiaries, providing financial services and operating marketplaces for securities in the Nordic, Caucasian and Baltic regions of Europe.
Historically, the operations have been held by the company OMX AB, which was created in 2004 upon a merger between OM AB and Helsinki Stock Exchange. This acquisition included the Baltic stock exchanges in Riga, Vilnius and Tallinn. OM AB was a futures exchange founded in the 1980s to introduce trading in standardised option contracts in Sweden, which later acquired the Stockholm Stock Exchange in 1998.
In 2005, OMX acquired the Copenhagen Stock Exchange for over €164 million, followed by the Iceland Stock Exchange acquisition in 2006. The next year, OMX successfully acquired the Armenian Stock Exchange and Central Depository.
In 2006, OMX launched the OMX Nordic 40, a pan-regional capitalisation-weighted index that consists of the 40 most-traded shares from the four stock markets, including Stockholm, Reykjavík, Helsinki and Copenhagen.
In 2008, Nasdaq bought OMX for $3.7 billion. The newly merged company was called the Nasdaq OMX Group and was later renamed to Nasdaq AB.
Currently, the company operates eight large European stock exchanges as well as runs the First North, an alternative stock exchange for smaller companies in Europe. Nasdaq Nordic also owns OMX Technology, which develops and markets systems for financial transactions used internationally.
The Stockholm Stock Exchange: everything you need to know
Nasdaq Stockholm, also known as the Stockholm Stock Exchange or Stockholmsbörsen in Swedish, is a large stock exchange located in the capital of Sweden. Ever since its establishment in 1853, it has become the primary securities exchange of the Nordic countries.
The Stortorget square in Stockholm had long served as a marketplace for trading services and goods. In the 1760s, it was decided that a stock exchange should be built in the city. To finance construction, a tax was levied on all luxury goods imported into Sweden, and the exchange building was finally completed in 1778.
In the 18th and early 19th centuries, most trading on the stock exchange included goods, marine insurance policies, promissory notes and drafts. But with the development of industrialisation, the nature of trading has changed. During 1853 – 1860, the city brokers recorded four transactions in bonds and six in shares. The first stock exchange auction, as we know it today, was held on 4 February 1863, when 22 transactions were concluded.
A whole century later, in 1989, the stock exchange’s electronic trading system Stockholm Automated eXchange, or SAX, was created. Stock exchange members no longer needed to have representatives in the actual building, and brokers could be connected to SAX from anywhere in the world. 31 May 1990 was the last day of trading on the floor, and soon all shares were transferred to the SAX system.
In June 1997, the Stockholm Stock Exchange was the first stock exchange in the world to achieve certification ISO 9001 in accordance with the international quality standard.
Trading hours for the exchange are from 9:00 am to 5:30 pm local time (GMT+2:00), excluding weekends and national holidays declared by the Exchange in advance.
Swedish stocks to invest in
When browsing the Swedish stock market, there are a plethora of assets to invest in; your choice simply depends on your personal preferences, goals and trading strategies. Luckily, the Stockholm stock exchange offers investors a full range of securities, including shares, indices, options, futures and ETFs/ETPs. The country’s government attracts foreign investors by ensuring the ease of buying or selling a stock on the national exchange.
As a matter of fact, there are around 380 companies that are available for foreign investors on the Swedish exchange. The list of the Swedish publicly traded companies is rather extensive and headed by Volvo AB, with revenues of over $41.948 billion in 2018; telecommunications company Ericsson AB, with $24.267 billion in revenue, and multi-national ‘fast fashion’ retailer Hennes & Mauritz AB, better known as H&M, with revenues of $22.577 in the last year.
In the background is a wealth of other publicly traded companies from different industries, presented by Nordea, Svenska Handelsbanken and Swedbank in banking services; Electrolux in electronics; Axfood in food retails; Oasmia in pharmaceuticals; Atlas Copco, ABB Lt and Sandvik in industrial technologies; Loomis in automobiles, and BioGaia and AarhusKarlshamn in healthcare. Don’t forget about a large digital entertainment company The Modern Times Group, as well as about HIQ International, offering IT services in Scandinavia and Russia.
Do you already want to invest in Sweden? There are a number of ways you can invest in Swedish stocks, however, one of the most popular and easiest ways to do so is through contracts for difference (CFDs).
How to trade Swedish stocks CFDs
Trading Swedish stocks can be rather simple with CFDs. A contract for difference is a type of agreement that is made between a broker and an investor in order to profit from the price difference between the opening and the closing value of the trade. When trading international assets, CFDs offer you an opportunity to go long or short on the market without the need to deal with conventional exchanges, providing easier execution and greater liquidity. It also allows you to trade on margin, providing bigger exposure to the chosen markets.
Moreover, when trading CFDs, you don’t actually buy the underlying asset itself, but instead, deal with the buying and selling prices of a given financial instrument in order to profit from the price difference. However, as CFDs are a leveraged product, winnings, as well as losses, are magnified.
Check out Capital.com to learn the latest information and trade Swedish stocks CFDs.
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