Friday, August 5, 2011

Today's Major Market Move - Finnish Stock Market Down Over 21% for the Month

There has been much carnage on the equity market landscape this past month and the usual suspects of Greece, Italy, Portugal, Spain and Cyprus were all down at least 15%. But today we'd like to discuss the Finnish market which hasn't received as much attention. The three Finnish equity indexes that we track, the OMX Helsinki 25 Index, the OMXHCap and the OMX Helsinki Index were all down over 21%. All 3 were in the top 5 decliners of global equity indexes.

Click on the image for a larger view.
Click here to view the table with the most recent data.

We talked about Finland's stock market in a recent post back on July 20th. In the post we pointed out how Nokia represented a large proportion of the total market cap of the Finnish market.
Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country.[12] It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.[13] Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finnish GDP was 3.5% and accounted for almost a quarter of Finland's exports in 2003.[14]

As most people are already aware, Nokia has been rapidly losing market share in the mobile device space. According to Gartner, Nokia's share declined a staggering 5% YOY from Q12010 to Q12011. With the increasing popularity of the Android and iPhone platforms, it doesn't look like that trend is going to reverse itself anytime soon.

The outlook for Finland over the longer term is also pessimistic. According to the IMF, Finland's real gdp is estimated to grow only 15% over the next 5 years, lowest in the Scandinavian and Baltic regions.

Click on the image for a larger view.
Click here for a live version of the above chart.
(Please be patient, the chart takes about a minute to load.)

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