Portfolio Investments, September 2006

Investments in foreign equity securities led to net outflows

Cross-border portfolio investments generated capital outflows of SEK 7.9 billion during September. The main contribution to the outflow came from Swedish investment in foreign equity securities, which amounted to a net total of SEK 11.3 billion. The net purchases mainly comprised British, Norwegian and US equity securities. Foreign investment in Swedish equity securities led to a net inflow of SEK 2.6 billion. Bank shares attracted the greatest interest from foreign investors.

Transactions in debt securities during this period generated a net inflow of SEK 0.8 billion. Foreign investors increased their holdings in debt securities denominated in foreign currency, mainly as a result of banking sector issues abroad. Holdings in SEK-denominated securities declined, however, as a result of extensive sales of mortgage bonds and money market instruments. Repo statistics indicate that the transactions in SEK-denominated mortgage bonds were largely financed in the repo market. Swedish investors reduced their holdings in money market instruments and instead increased their bond holdings. The greater part of the investments was made in British and German bonds denominated in foreign currencies.