Erikoissijoitusrahasto Taaleri Mikro Markka Osake is a non-ucits open-end fund domiciled in Finland. The Fund’s objective is long-term capital appreciation. The Fund invests its assets in Finnish small-cap stocks.
In March the corona virus started to really affect stock markets. Volatility surged amid increasing numbers of corona deaths and even the most prestigious stock indexes had daily movements of more than 10%. All eyes were on corona and that created a spiral of panic. Investors and other people are closely monitoring countries like Italy, Spain and towards the end of the month also USA. Fortunately, central banks and governments have been quite active and have created and initiated massive financial aid packages here and there, including ECB and the FED. It’s also noteworthy that China is already recovering which creates a significant tailwind as Europe and the US are struggling. In Finland, we have seen a tsunami of profit warnings, partly thanks to our Financial Supervisory Authority which has given instructions how to guide during these extreme times. Many companies have also postponed their AGMs and dividends due to coronavirus.
Many Finnish stocks have plummeted by 30-60% during the corona crash so far. Some companies have survived without bigger stock price movements. We have had a nice pile of cash in the fund which has helped us to utilize the dip a certain extent. Also, many portfolio holdings of the fund have issued profit warnings, not surprisingly. On company level we highlight that Remedy Entertainment might be one of the rare beneficiaries of the situation as people are bored at home. The company also released a very compelling game publishing deal with a good partner. Remedy has also kept its guidance intact. In March we have bought some QT and Detec but also took part in Bilot’s IPO with a very small ticket. In addition, we also further increased our position in Exel Composites. Noho Partners is one of the companies with biggest corona impact as restaurants are facing a severe crisis. We think, however, that they will get subsidies and survive and with current information we are willing to watch beyond corona. In general, we have found some interesting companies to invest in during the crisis, more to follow in the next monthly text.