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Nordic Factoring fund AB (publ) reports a NAV rate for October of 105.03. That's an increase of 0.41 %. The fund has high liquidity and continues the work of identifying and investing in new projects to convert the excess liquidity.
The inflow during the month of October is SEK 39.7 million, many thanks for that.
We are aiming for a return level of around 6 %.
The market and the economy
During October, the stock market in several parts of the world recovered somewhat and had a positive development. We saw a drop in the US 10-year yield which could indicate that the Fed is pushing the economy into recession while the stock market sees the rate cut as positive for stocks and is likely a big reason for the stock market recovery in October. During October, the Swedish krona stopped weakening against most currencies, which may be a consequence of recovery in the stock market. During October, many companies reported their quarterly reports, with several showing good resilience against the market situation and reporting results above analysts' expectations.
High inflation, rising short-term interest rates and electricity prices continue to hit the economy hard and erode household purchasing power. A designed energy support seems to be imminent and will now be tested by the energy market inspection, which can ease the burden on households and companies. Inflation is expected to remain high and possibly rise further in the short term, which indicates that key interest rates will also continue to rise. The global economic situation continues to affect the Swedish export industry and is not expected to improve in the short term. The economic institute's barometer indicator continues to fall and the worst is the retail confidence indicator, which is strongly affected by household purchasing power and increased costs. Reduced purchasing power and expected increased unemployment in 2023 can reduce inflation and then also dampen or reverse the trend for higher key interest rates.
IFRS 9
The reserves in this fund are very low. The fund's entire exposure is in category 1 and the security is over 30,000 invoices pledged in favor of the fund. The invoices are rolled over in 30 to 90 days with credit insurance both with and without recourse. Furthermore, there is property insurance for an eventuality should false invoices appear.
Against the background of the aforementioned weaker economic outlook for the market, we have tightened and continued to tighten our routines for monitoring outstanding invoices.