Credit market sentiment stabilises but property equities outperform

In the December issue of CREDI, the Main index decreases from 56.3 to 49.5 indicating a slightly weakened credit market. Meanwhile, market capitalisation soars as premium exceeds 30 per cent.

“This year’s fourth CREDI survey indicate a stabilised credit market sentiment as respondents’ see slightly higher credit margins going forward. The CREDI Main index declined from a previously high level to below the 50-mark, the largest drop in the CREDI Main index since December 2015. In the meantime, market capitalisation soar above SEK 580 billion and implicit yield falls below 4 per cent,” says Carl Wingmark, Partner at Catella.

“The Swedish equity market is a good leading indicator of the CREDI Main index. Although the CREDI index has fallen back since October, the strong performance on the equity market during the autumn indicates stable credit sentiments and bank lending to the property sector going forward,” says Arvid Lindqvist, Head of Research at Catella.

“The volume of outstanding bonds increased by a substantial 15.5 per cent during the quarter and bonds now make up around 34 per cent of the listed property companies interest-bearing debt. Interest for the bond markets may increase further going forward as the Swedish financial supervisory authority has indicated higher capital requirements for banks lending to the property sector,” Arvid Lindqvist concludes.

The Catella Real Estate Debt Indicator (CREDI) is attached and can also be downloaded from catella.com/en/news-and-pressreleases/research. CREDI consists of two parts: one is an index based on a survey of listed property companies and active banks, and the other a set of indices and analyses based on publicly available data.

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Catella is a leading specialist in property investments and fund management, with operations in 15 countries. The group has assets under management of approximately SEK 185 billion. Catella is listed on Nasdaq Stockholm in the Mid Cap segment. Read more online at catella.com.

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