Catella : 2015 was characterised by falling interest rates and strong small cap performance

The first major crisis came from the newly elected Greek government, which during the summer created huge political unrest and forced the 'troika' into renegotiations. This was followed by sharp stock market falls in August and September, mainly due to increased concerns about the economic development of emerging countries in general, and China in particular.

Although China's slowdown has so far taken place under controlled forms, partially balanced by accelerating growth in the services sector, it has affected many countries and companies that were directly dependent on China's construction and investment boom.

Performance for the Nordic countries was mixed. The Swedish economy remains in a strong growth phase, primarily driven by strong domestic demand, which is a result of positive employment growth and a sharp rise in disposable income. Denmark continues to recover, mainly due to rising household consumption, while the Norwegian economy is being hit hard by the downturn in oil prices. Finland is having a tough time with recession and continued weak exports, mainly due to developments in Russia.

Central banks remain in focus

The world's central banks were once again in the spotlight during the year, and we expect this to remain the case for the coming year. Weak growth and low inflation figures led most of the world's central banks to implement further easing, through interest rate cuts, quantitative easing (QE), general commitments, or a combination of all these. The United States was the exception, and in mid-December the US Federal Reserve upped its policy rate by 0.25 percentage points. Consequently, the US dollar continued to strengthen against the euro, the Swedish krona and the Norwegian krone. During the period, the Swedish krona strengthened slightly against the euro.

Our assessment is that returns on traditional interest-based savings will be low in the near term, based mainly on the Riksbank's clear inflation target of 2 percent. This will force the bank to continue to hold interest rates at a low level during 2016. However, there are attractive opportunities in the corporate bond market for anyone willing to accept higher risk and thus increase their expected return.

Stock market performance

The Nordic stock markets reached their highest level for the year as early as April. Then came concerns about the global economy, weaker reports and further downward revisions of earnings estimates, overwhelmingly in the cyclical segments.

Earnings estimates for the Nordic equity markets in 2016 are the lowest we have seen in several years. Stock market valuations have decreased in pace with the weak performance during the autumn. For the coming year, we expect continued high volatility in most asset classes, and in the current market climate we retain our focus on quality companies with sound finances in industries that offer good growth potential.