'Aktuaalne kaamera': Stock markets had a bad year
2022 represented a bad year for the stock market, both in Estonia and globally, ETV news show "Aktuaalne kaamera" (AK) reported New Year's Day.
The year was notable for the substantial fall in both stocks and bonds, AK reported.
SEB private banking strategist Peeter Koppel told AK that 2022: "Was a difficult year, and an exceptional one in the sense that while stock market investors take into account the fact that they have lost 10-15 percent on average, the real action took place in the bond markets, i.e. with inflation, interest rate increases, leading to a very strong decline in bonds."
"If we take for example the long-term US government debt, the falls there were as much as 30 percent," he went on.
Wth respect to currency, Peter Priisalm, head of investments at Avaron Asset Management, told AK that: "Until 2022, money was definitely a good asset class to hold. It retained its value in the sense that it lagged behind inflation, but did not fall compared with stocks and bonds."
Koppel said that 2023 may be a bit better, though in part simply in proportion to the squeeze already experienced in 2022.
"The other interesting point is that there hasn't been a year where stocks and bonds went down together, to years in-a-row," he added.
Priisalm was more pessimistic, adding that it is not so much a question of whether there will be a recession so much as how deep that recession will be – one which is likely to be deeper than many central banks have estimated, in their assumption that they will be able to get inflation under control and ease their monetary policies.
At the same time, the success of pensions funds has necessarily gone hand-in-hand with that of the stock exchange.
Age Petter, head of Swedbank's investment funds, told AK that: "At the moment, the outlook is mixed, but the forecast is that the actions of the central banks could bear fruit and that inflation can be brought under control more or less, which could in turn also lead to the stabilization of interest rates.
"While there are not great prospects for economic growth, this does not necessarily mean that the financial markets must have a bad year. A large part of this negativity has already been factored into that already," Petter added.
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Editor: Andrew Whyte, Merili Nael
Source: Aktuaalne kaamera