The Finnish market, according to analysts and brokers, represents good value when compared to what may be overpriced markets elsewhere in Europe.

Finnish companies are at a discount compared to other countries so they may present a good alternative to European investors," says Jaakko Niemela, director of equity brokingat Helsinki-based Opstock Securities.

"Finnish equities are valued just now at a discount of 20-25% and we think that by the time the Euro arrives the valuation should be quite near the European average," he continues.

Karri Alameri, portfolio manager with Carnegie Asset Management in Helsinki, believes that despite the bull-run of the last year and rally in recent weeks that there is still potential for growth. "Finland is still fairly valued or low valued depending on how you measure it. Earnings are good and the valuation moderate compared to other countries," he says.

Jukka Huuskonen, senior investment analyst of Arctos Securities in Helsinki, be-lieves that the fundamentals are right with good prospects for the corporate sector and dividend yields. In addition and as with other analysts, he believes that the macro-economic environment favours equities in the medium term with Finland fitting into the pattern of broader European growth.

"We have very low inflation and above average OECD economic growth in this country. The corporate sector is operating currently under a very favourable economic climate," he says.

Niemela adds: "The Fin-nish economy is the fastest growing area in GDP in the OECD for the fourth year. This macro is situation is very favourable for the stock market."

Discussing the bond market, Alameri says the picture is clearly dominated by EMU. There is a narrow spread be-tween Finnish rates and the German bund with no reason for it to widen as Finland should be in the first round of EMU.

He adds: "We are going to see bonds trending higher but there should be no large hikes. The Bank of Finland has recently raised the ten year rate, and we will see an-other change before year end but these are very modest changes."

Alameri continues: "Interest rates are low, there will not be any inflation pressure here," adding that the current central wage negotiations due for completion early next year should see no significant hikes in salaries.

The interest situation, ac-cording to Niemela, is also changing the pattern of saving.

Huuskonen says that the major risk for the market is related to the international climate, namely the US market.

Alameri, noting that a similar situation applies to the Swedish market adds: "You have to remember that some 40% of the volatility in Finland is the result of events on Wall Street. If it is going down of course Finland is going to be hurt."

Niemela, however, believes that the threats to the market albeit unlikely ones, come from a breakdown in EMU or from the economy overheating.

In terms of sectors, Huuskonen favours selected cyclicals in the forestry sector, metals, steel and chemicals and some of the late cyclical engineering companies.

Alameri adds: "You can always mention Nokia. The company is still looking good. There are growth prospects for the whole telecom industry."

"There are also interesting situations in the insurance and banking business." He believes that more mergers such as the Merita and Nord banken announced on Monday will be on the way.

Niemela like Alameri favours the telecommunications sector and the financial sector and endorses one of the favoured Finnish stocks. "Nokia seems to have a very strong growth for the longer term," he says. John Lappin"