Index movements were relatively moderate if we look only at the start and end of November, but much more happened in between. There were dramatic increases in European electricity prices, and inflation resurfaced as a talking point when pundits began to question the claim from central banks that the issue is transient.
The Glasgow climate meeting focused on achieving 1.5 degrees, and emissions trading saw a continued increase in the cost of emitting one tonne of carbon dioxide. The price of EUR 74 was almost 30% higher this month and about 130% higher than at the start of the year. A new virus mutation – Omicron – was discovered at the end of the month, leading governments to introduce new travel restrictions. The market reacted with sharp stock market falls, and interest rates and commodities like oil plummeted.
Getinge held a capital markets day and announced upped growth targets. Its ambition is to grow profits by at least 10% per year. Getinge is a very well-run company in interesting growth niches, and all its divisions have good growth potential. The Life Science and Sterile Transfer arms are really outstanding. We also see good potential for Getinge to increase its acquisition rate in the coming years.
ABB was the fund’s best stock this month. With Björn Rosengren as CEO, the company is undergoing an exciting transformation. It has abandoned its matrix and country structure and has opted instead for decentralized management, reduced overheads and increased responsibility for profits within each unit. ABB is very attractive in a future where impending climate change increases the need for smart solutions in electrification and automation. Next year, the company intends to list its operations within E-mobility, the world’s leading player in charging infrastructure, which will further demonstrate ABB’s strong position in transition products.
Holmen is one of our holdings that has been in the fund for a long time. The share has not followed the index in 2021, but we see continued potential in the company and the share. Its forest is still undervalued in relation to market prices and its valuation potential, and we generally believe that timber will be given a greater role in construction, which in turn should benefit timber prices and forest values. In addition, paper prices look set to increase sharply as we enter 2022, Holmen Paperboard is competitive and has good and stable profitability, and finally we believe that Holmen will create great value by developing its own wind power.
The fund made only small changes in November. We reduced our holding in SEB somewhat after strong price growth in October.