The ongoing crisis caused by the coronavirus has led to large falls in the stock market, and has also had a substantial effect on the corporate bond market. Firstly, it is evident that the market has repriced the view of risk in the underlying bonds, resulting in higher credit spreads and consequently lower prices. Secondly, the liquidity, i.e. the ability to buy and sell securities, in the Nordic corporate bond market has also become considerably lower than previously. Sweden's Riksbank announced yesterday that it intends to include corporate securities (issued by non-financial companies) in the purchases of securities up to SEK 300 billion as one of several measures to stabilise the economy and the financial markets. Exactly what instruments may be included in these purchases is not yet clear.
Catella Fonder yesterday participated with other fund management companies in a meeting with Sweden's Financial Supervisory Authority (Finansinspektionen) about the current market situation. All fund management companies make different judgments based on the specific circumstances of their own funds.
Catella Fonder is closely monitoring the situation and any impact this could have on trading in our funds. Our current assessment is that trading in our funds can continue, but we are very aware that this could rapidly change as new information becomes available about the prevailing market conditions.