Blog

Every day the media report on «the political circus». In a world where geopolitical tensions and power games are everywhere, current international events are indeed reminiscent of a circus performance. For us as asset managers it’s a fascinating but chaotic spectacle, with performers from various countries displaying what they are capable of. Countries and decision makers are showing off their skills on the global stage like artistes in front of an audience. They are pursuing their own interests, but at the same time keeping an eye on what the others are up to.

Welcome to the fascinating world of Switzerland – a country known not just for its majestic Alps and delicious chocolate, but also for its bravery and its stability in turbulent times. While many central banks were acting cautiously last year, the Swiss National Bank stepped up, cutting interest rates at all four of its meetings. A bold and far-sighted decision that exemplifies a resolute approach to challenges.

Imagine the following scenario: the top decision makers at a central bank are sitting around the boardroom table in their suits wondering whether to press the magic interest rate button to stimulate the economy. The question they are asking themselves is something like this: “Should we be giving the economy a cup of regular coffee, or does it need a double espresso?” And when benchmark interest rates come down, hopes rise that companies and consumers will soon be spending happily once again and gross domestic product will go up.

The central banks once again proved to be the key market drivers in the second quarter. The Swiss National Bank set the tone and surprised the world by cutting interest rates in March, and then again in June. The European Central Bank is keen to demonstrate its independence from the Fed and also risked a cut in June.

Interview between Luca Carrozzo and the Swiss Association of Wealth Managers.

Every month we publish our opinion on the macroeconomic environment.

Every month we publish our opinion on the macroeconomic environment.

After a long period of negative interest rates and rising inflation, central banks have hiked interest rates. But how did we get to this turning point, what impact will it have on the global economy and what does the future hold? Find out more in our blog.

Gold is seen as a safe haven in times of uncertainty. Read our blog post to find out more about how the gold price has performed and the factors that affect it.

As a global market leader in generics and biosimilars, Sandoz benefits more than average from rising patent expiries. The first annual financial statements as an independent company released in mid-March showed that the high-margin biosimilars business in particular is growing strongly (+15%). The company is looking to expand this division. Total revenue was up 7% in 2023, but the margin fell to 18% due to one-off costs from the spin-off, amongst other things. Financial analysts were originally looking for a target of CHF 40, but the stock price has moved sideways around the CHF 25 level since the IPO on 4 October 2023. Given the forecast revenue growth of 5% and margins that should hit 20%, a price/earnings ratio of 11 is far too low.

The first quarter is already behind us and performance was positive. Artificial intelligence remained a focus of attention and was one of the main drivers of the positive return from financial markets. According to a study published recently, the number of companies mentioning AI in their financial reports has reached a new record: 36%.

At a time when stock market indices all over the world are hitting new highs, the Swiss market is standing out for its remarkable restraint. The DAX, CAC 40, DJII and S&P500 have all been putting in impressive performances and setting new records, but the Swiss equity market is stuck some 10% below its all-time high at the end of 2021. This raises questions, especially as the Swiss franc has appreciated strongly against the dollar and the euro, and as major stocks like Roche and Nestlé show signs of weakness. In our interview with Chief Investment Officer Luca Carrozzo we investigate the reasons behind the poor performance of the Swiss market, discuss the role of the strong franc and consider whether the Swiss National Bank (SNB) needs to cut interest rates to get the equity markets going again. Find out why Swiss securities are out of favour at the moment and what this means for investors.