The Swiss Stock Exchange started Tuesday’s session on the right foot, in the wake of Wall Street’s rising close the day before. While a new burst of results awaits investors, including those of the number one Swiss bank UBS, uncertainty remains over the evolution of the monetary policies of the main central banks.
Across the Atlantic, the main indices ended the first session of the week with a modest increase and in low volumes, investors still digesting Friday’s employment figures, indicates John Plassard, of Mirabaud Banque. At the monetary level, the expert highlights the “hawkish” comments of Fed Governor Michelle Bowman.
According to Ms. Bowman, “It is important to note that monetary policy does not follow a pre-established path. My colleagues and I will make our decisions at each FOMC meeting based on the data received and the implications and risks for the outlook. Although the current stance on monetary policy appears to be restrictive, I remain willing to raise the federal funds rate at a future meeting if available data indicate that progress on inflation has stalled or reversed. Restoring price stability is essential to achieving a maximum level of employment in the long term.
On the macroeconomic data front, German industry posted mixed performances in March with an unexpected drop in order books contrasting with a rebound in exports, which are resuming their role as the driving force of Europe’s largest economy. In Switzerland, the unemployment rate fell in April to 2.3%, after 2.4% in March. In total, 106,957 people were registered as unemployed with the regional employment offices (ORP), or 1,636 fewer than the previous month.
This Tuesday, investors will still be looking at retail sales in the euro zone in March as well as changes in consumer credit in the United States. They will try to find new economic indications regarding the future movements of central banks.
On the Swiss Stock Exchange around 9:10 a.m., the SMI consolidated its gains after opening up 0.22%, recording at 11,428.43 points, an increase of 0.89%. The SLI increased by 0.69% to 1870.44 points and the expanded SPI indicator by 0.73% to 15,268.92 points.
Of the thirty stocks making up the Swiss Leader Index, only five lost ground, the other 25 gaining. The three heavyweights of the rating, Nestlé (+0.3%), Novartis (+0.4%) and the good Roche (+0.5%) did a little worse than average.
At the top of the table, UBS took off by 6.6%, followed by Geberit (+5.2%). The Swiss banking number one returned to black figures in the first three months of 2024, after two consecutive partial losses and a year after buying its faltering counterpart Credit Suisse. Proof of the renewed confidence, the Zurich establishment recorded significant inflows of cash.
The St. Gallen bathroom equipment manufacturer reported a turnover of 837 million francs, down 6.2% compared to the first quarter of 2023. The performance, however, proved to be higher expectations to.
Sika (+1.3%) settled on the 3rd step of the provisional podium, without specific information. Straumann (+1.1%) and Kühne + Nagel (+0.8%) were also sought after.
Among the other information of the day, Richemont (+0.4%) announced the acquisition for an undisclosed amount of the Italian jeweler Vhernier.
At the bottom of the table, Sandoz (-2.6%) inherited the red lantern. The pharmaceutical group generated a turnover of $2.49 billion (2.25 billion francs) over the first three months of the year, up 6% year-on-year excluding currency effects. Performance was mainly fueled by biosimilars, openly favored in the Rhine group’s strategy.
On the broader market side, OC Oerlikon soared by 11.6%, even though the Schwyz industrial group recorded a decline in sales in the first quarter. The group notably suffered from a market environment that remained difficult for the textile industry.
Idorsia gained 5.1%. No less than 83.5% of bondholders voted on Monday in favor of the changes proposed by the Allschwil laboratory, beyond the required majority threshold of two-thirds. The vote focused on the conversion of a loan of more than 200 million francs, at the price of 6.00 francs compared to 33.95 francs currently. The deadline has been extended by six months, until January 17, 2025.
The real estate company PSP (+0.3%) saw its rental income increase by almost 10% in the first quarter to 89.2 million francs, despite the increase in the vacancy rate. At the same time, the Zougois group raised its operating profit forecasts (Ebitda) for the current year.
Adecco fell 0.9%. The personnel placement giant saw its revenues contract slightly over the first three months of the year, while its profitability fell more heavily. The group said it was on track to achieve its savings targets in 2024. (AWP)
