Market uneasiness dampens prices
The Stockholm Stock Exchanges SAX Index, which reflects the average trend of share prices, declined by 29 percent during the same period. Most of the substantial fall to date has occurred in the second quarter. During this period the SAX Index fell by 26 percent, while Swedish Match shares lost 7 percent in value. The trend was similar on the Nasdaq exchange in America, where Swedish Match depositary receipts are listed.
The Nasdaq Index has fallen by more than 30 percent since the first of the year. Including the stock dividend for the year, SEK 1.45 per share, the total return to Swedish Match shareholders up to now this year amounts to 29 percent. The good return last year (a total return of 56 percent) has thus continued during the first part of this year. Swedish Match shares have developed better than any of the shares of companies on the Exchanges »big« list of most actively traded shares during the past eighteen months. The striking decline for IT and telecom shares has recently spread to a number of sectors of industry and commerce, including banks and industrial companies. The companies that have shown the best resistance to the prolonged decline in share prices are consumer goods such as Swedish Match, as well as real estate companies.
The current period in the market has been characterized by scandals involving the financial accounting of large publicly traded companies. Companies with high debt relative to earnings capacity have experienced sharp falls in the prices of their shares and -- in many cases -- have received downgraded classifications from ratings institutions.
Swedish Match is a financially strong company and the Companys outlook have been raised during the period. (See separate article.) While the price of the Companys shares has fallen during the recent very turbulent period, the markets confidence in the Company still appears to be strong.
