For the 2nd day in a row, Swiss stocks have experienced decline after reports came out showing that the economy of this European country may weaken in the New Year’s first half. Apart from that, the unexpected fall of US GDP data worsened the scenario for Swiss stocks. The benchmark gauge SMI went down by 0.9% and is currently at 7387.90. Despite today’s decline, the gauge has still managed to advance by 8.3% in 2013. Incidentally, SMI came into existence in 1988 and since then, this year marks its biggest increase right at the start of a year. The broader Swiss Performance Index had similar fate as it retreated by 0.9% on today.
The Chief Investment Officer of Aimed Capital Management, Daniel Weston stated that Switzerland has been able to sustain growth over the years and the inflation has also been on the lower side. Thus, investors became more interested in Swiss stocks, leading to a good start in 2013. However, as it is showing a slight decline recently, investors probably have a good reason to take profit amidst a trend which is bullish.
For the 4th month in a row, the KOF economic indicator of Switzerland has decreased and this kind of fuelled the speculations of a weak Swiss economy in the first half of 2013. This gauge is calculated in every month and is aimed to predict the direction of a country’s economy over the next 6 months. The gauge was at 1.25 in December, however for January, it dropped to 1.05. The result was published by the KOF Swiss Economic Institute. The initial estimate for KOF in January was of 1.20.
Roche Holding AG experienced slide of 1.4% and each of its shares is currently priced at 198.60 Swiss Francs. The initial estimate for the company was of 13.67 Swiss Francs per share, but, as it reported its 2012 full year earnings, the same was at 13.62 Swiss Francs per share. As Exane BNP Paribas lowered the stock recommendation of UBS to neutral from outperform, the shares went down by 2.5%. The Credit Suisse Group also went down by 1.4% to 26.72 Swiss Francs per share. The biggest Swiss watch maker in the world, Swatch Group AG also declined by 1.9% on today. Swatch was mainly affected by its Chinese retail partner Hengdeli Holdings’ loss of exclusive distribution license.