Petri Ukkola, portfolio manager with Helsinki-based Tresor Investment Management, is quite optimistic for the Finnish market while giving much of the credit for this increase to one company, mobile phone manufacturer Nokia.

The company currently manages FM1bn ($188.6m) in total including, among others, funds for the ABB pension scheme.

Despite its bullish view of the domestic market, the firm is continuing to increase its international equity exposure but Ukkola adds that the main change is the move by pensions funds into equities.

We have been increasing our international exposure but the most important factor from amongst our clients is that Finnish pension funds have been giving more exposure to equities as a whole," he says.

He continues: "In Finland, the major market driver is Nokia which is a very important company here. Its weight in the local index is over one third. It brings extremely good results and it will drive the market up." Unsurprisingly given this assessment, Nokia figures strongly in Tresor's stock selection.

"The medium-term pros-pects for the Finnish market are quite good, we think that it could reach perhaps 15%," he says.

Other companies, he says, are also doing well in what is a relatively benign interest rate climate.

"The situation of quite low interest rates means that other companies are showing better results this year and will show better results next year."

As with other analysts Ukkola says that some small interest rate increases may be in the pipeline. There should therefore be only limited impact on the bond yield curve on this front.

Turning to investment flows, he expects to see an increase in the flow of funds from both domestic and foreign sources but the latter will continue to dominate.

"I think that we will see an increase in both figures. It is mainly foreign investors who are investing in Finnish stocks but we have seen that local pension funds have to re-allocate their capital more and more towards equities," he adds.

With a market still dominated by foreign money this leads to a correlation with the US.

"The main risk comes from developments abroad. If we see some kind of correction in Wall Street, it will be without doubt reflected here in the Helsinki market." John Lappin"