The Swiss stock market: “Black Swan in Switzerland” – Neue Zürcher Zeitung

The Swiss stock market: "Black Swan in Switzerland" – Neue Zürcher Zeitung

The decision of the Swiss National Bank (SNB) to waive the minimum limit of the franc against the euro, has ensured on the Swiss Exchange for a real storm. The Swiss Market Index (SMI) of the Swiss defaults lost after the announcement of the decision on Thursday 8.7%. On Friday, the decline

continued with a renewed decline of 6%. Many investors have assumed that Swiss companies are now less competitive due to the abolition of the minimum limit and are likely to post hefty profit losses, Claude Zehnder said, analyst at Zürcher Kantonalbank (ZKB). Sales were particularly shares of companies taken, which would have a significant cost base in Switzerland and which are heavily dependent on exports. The decision by the SNB was for the investors as a “black swan”. This term has become naturalized in the financial world and is based on a book of the author and financial expert Nassim Nicholas Taleb. The term describes Taleb events that were considered very unlikely and suddenly occur.

Many banks and asset managers were overweight Swiss equities before the SNB’s decision and would have the now revised quickly, it was said in the market. If the European Central Bank (ECB) on Thursday announcing a very large bond purchase program and the radical left SYRIZA win in the parliamentary elections in Greece, the price of the euro against the Swiss franc could continue to fall, it was called on. This could provide further pressure on stock prices of Swiss companies. Particularly strong buckled the titles of the export-oriented watchmaker Swatch and Richemont in the past trading week. The shares of Julius Baer banks, Credit Suisse and UBS lost after the announcement of the decision by the SNB to waive the minimum limit, very clearly. The investors would have probably sold the papers of the financial institutions on the one hand due to the even higher also announced by the SNB negative interest rates and on the other hand, due to the high cost base of the ba nks in Switzerland, it was said in the market. The circumstances got off lightly hit it according to the papers of the “big three.” – The pharmaceutical companies, Roche and Novartis, and the food manufacturer Nestlé

Lonely Leader in the SMI were in the past week, the title of the telecom provider Swisscom. Swisscom is the prime example of a Swiss company that was hardly affected by developments in exchange rates, it was said in the market. In case of doubt, the company benefiting from the weaker euro, since it can buy cheaper. This had benefited from the shares.