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Footonomics by Jakobsen & Garnry #2 Footonomics by Jakobsen & Garnry #2 Footonomics by Jakobsen & Garnry #2

Footonomics by Jakobsen & Garnry #2

Equities 5 minutes to read
PG
Peter Garnry

Head of Equity Strategy

Summary:  Today's Footonomics is about Denmark vs Finland which are playing the first match in group B. Denmark wins on macro with a superior Misery Index - it is wonderful to be a Dane after all. On equities the match is between Novo Nordisk and Neste, which the Danish pharmaceutical company wins 2-1 on better equity fundamentals despite Neste being a high quality oil refiner. Steen's and Peter's prediction is that Denmark wins 1-0 over Finland.

Match: Denmark vs Finland

Macro: Danish Dynamite vs. Finnish Sisu

  • Denmark has clear win on the Misery Index (CPI + Unemployment + Budget deficit) with the low score of 8.3 vs. Finlands 13.7. Unemployment being the big difference.
  • Denmark is ranked 51st in GDP globally vs. Finland 57th. A draw.

  • Denmark has most losses in the European Championship at 14 (Whaaaaaat….) vs. Finlands 1st ever Championship. Congratulations. Finland win as the 1st Championship is amazing result.

  • Best football quotes: Denmark. Richard Møller Nielsen, the winning 1992 national coach: “..We must screw down the expectations. We change our tactic and play with long balls” vs. Finland. “Jari Litmanen should be made compulsory” Ron Atkinson. How can you beat..” long balls??… Denmark win.

Equities: Novo Nordisk vs Neste

  • Novo Nordisk, the world’s largest insulin maker, wins 2-1 over Neste, one of Europe’s largest oil refiners, as the Danish pharmaceutical company is cheaper on valuation (22.9 vs 25.4 on 24-month forward P/E ratio) and has a better return on equity (75.9% vs 23.3%). Neste scores a goal on a slightly higher expected growth rate (9.0% vs 8.1%). Neste is one of the highest quality companies in Europe but battling another high quality company is just a tough match.

  • Novo Nordisk has been riding the diabetes disease for decades with the Chinese looking to be the next growth leg. A recent spinoff of the company’s insulin drugs is a new weight loss drug that has just got FDA approval based on trials showing 15% weight reduction, which according to Obesity Medicine Association is a “game changer”.

  • Neste has performed outstanding over the past decade lifting operating margins from around 5% to around 17% today. Recently the refiner has taking the lead on renewable diesel and jet fuel as the refiner is transitioning its business towards the green transformation.

Outrageous Predictions 2023: The War Economy

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    The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
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  • French President Macron resigns

    The political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
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  • Gold rockets to USD 3,000 as central banks fail on inflation mandate

    As markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
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  • EU Army forces EU down path to full union

    With continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
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  • A country agrees to ban all meat production by 2030

    In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
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  • UK holds UnBrexit referendum

    Following a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
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  • Widespread price controls are introduced to cap official inflation

    History tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
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  • OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset

    Sanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
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  • USDJPY fixed to the USD at 200 as Japan overhauls financial system

    Following the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
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  • Tax haven ban kills private equity

    With the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.
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