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The Swedish economy is a highly developed export-based economy that is centered around its modern agrarian economy and highly developed workforce. Most of Sweden’s laborers are employed in some aspect of the agricultural sector. However, the Scandinavian superpower also has powerful telecommunications, motor vehicles, pharmaceuticals, forestry, iron, steel, and precision equipment industries. While most of the companies operating within these industries are privately owned, the Swedish state does own a minority stake in some of the more powerful sectors of the economy. Sweden also boasts the Nordic model of which ensures that income is distributed across the entire society. This munificent universal welfare system is paid for through the somewhat steep income taxes of the region.
Sweden managed to achieve great economic stability over such a prolonged period of time, because unlike many countries in the region, Sweden was not a participant in the second World War. Since the Nordic country did not have to stabilize its economy after the war, Sweden was able to achieve an unusually high standard of living through its extensive welfare system and advanced capitalism. The country has the highest total tax income after neighboring Denmark, making up just under half of its gross domestic product. This article will cover the financial system of Sweden, as well as a range of market information covering currency, futures, and stocks.
show moreThe Swedish stock exchange, known informally as the Stockholm Stock Exchange (translated in Swedish as Stockholmsbörsen), operates under its register moniker the Nasdaq Stockholm. The exchange is headquartered in Stockholm, Sweden and has operated there for almost two centuries. Nasdaq Stockholm lists over 300 companies on its exchange for public trading.
The Swedish Stock Exchange was purchased by the futures exchange, OM, just before the turn of the century. Sometime shortly thereafter, OM merged with the Helsinki Stock Exchange to establish the OMX.
In the late 19th century, the Swedish krona (SEK) took the place of the riksdaler riksmynt, when the Scandinavian Monetary Union was formed. Together, Denmark and Sweden began using the gold standard to value the krona. Sometime later, Norway joined the union at the same value as its Nordic neighbors. Post-World War I, the union broke up and Sweden decided to keep its native krona. Although it was previously pegged to the gold standard, the currency’s value is now allowed to freely float against other currencies within an unspecified range. The Swedish central bank also props up the value of the native krona when necessary.
Since much of a currency’s value is determined by a country’s interest rate, it is important to note that Sweden is the first country in history to impose a negative interest rate. In fact, Sweden lowered the rate to -0.25%, and while this initially strengthened the currency’s value, the mix of a global recession and the nation’s experimental interest rate resulted in an extended weakness of the krona. Shortly thereafter, the krona lost almost a quarter of its value against the American dollar.
The SEK is one of the more exotic currencies traded on the foreign exchange market. Along with the value of its indigenous commodities, the Swedish krona is firmly correlated with the currency of its Nordic neighbors, the Danish and Norwegian krone. It is also popularly traded against the euro (EUR/SEK) and Great British Pound (GBP/SEK) as well. Currently, the Swedish krona is the 9th most traded currency in the world.
The Swedish krona, plural kronor, has been the longstanding currency for Sweden for just under two centuries. The direct translation of krona into English means ‘crown’ and the term is used by all Nordic nations to describe its currency. The Swedish krona is symbolized as kr in financial circles. The krona can be divided into 100 cents called öre (both plural and singular) but this is only for accounting purposes. In real life transactions, öre are rounded to the nearest krona value when purchasing goods. Swedish citizens also refer to the krona as spänn or kosing, depending on the regional dialect.
Sweden’s financial exchange represents some of the most stable and financially valuable investment opportunities on the European continent. The country is one of the most politically stable powers in the world and its history for avoiding conflict has long been an integral component of its economic success.
The country’s strongest and most liquid companies are tracked on the OMX Stockholm 30, coded as OMX30, which is the nation’s most popular stock index. The companies listed on this index reflect the backbone of the Swedish economy and mainly reflect the agriculturally centered economy. Many of these companies may double as leaders in the industrial production or natural resource mining sectors of the Swedish economy as well. While many of these investments make for safe speculation, they may result in less than aggressive growth.
