10th October 2017
Jean-Louis Richard, Senior Financial Analyst
Swiss equities gained +3.2% over the 3rd quarter. This was the 6th consecutive quarter of rising stock market, resulting in an increase of +25.6% over this period. Since the beginning of the year, the market gained +16.5%, of which dividends account for more than +3.5%.
As it is often the case in such an optimistic environment, the smaller capitalisations raced ahead. The SMIM Index, comprising midcap companies highlights this well: it gained +28.3% over 9 months thanks to companies such as Sonova (+43.2%), Clariant (+39.2%) or Kuehne Nagel (+37.7%). More defensive stocks came in at the end of the league table; this was the case for Helvetia (+0.3%) and PSP (+4.9%).
Looking at larger capitalisations, the luxury companies Richemont (+36.1%) and Swatch (+29.6%), as well as some industrials like Sika (+51.2%) and ABB (+17.8%) positioned themselves well. Globally speaking did financials underperformed. Swiss Re (-2.7%) was the only one in negative territory and was followed by UBS (+8.7%).
In the universe of Swiss equities, the Zurich listed Austrian producer of electronic chips AMS rose (+155.8%); AMS has managed to increase its contribution to the new smartphones of Apple. Another special case is the stock of the Swiss National Bank (+115.9%), whose rise is quite a mystery. As the dividend is legally determined and fixed, this stock is very much like a very long term bond. Some investors hence seem to prefer holding this security and receive a small dividend, rather than buying a bond whose yield to maturity is negative.