The results of the second quarter are a test, following 12 months of rising equity markets

26th July 2017

After the 25% rise of equities since the summer 2016, the publication of the second quarter results will be a test in order to justify the optimism of investors. Up till now, less than one European company out of five has published its figures. It is therefore too early to have a general view. With regards to Swiss equities, we were impressed by Kühne Nagel: its transported volumes increased by 8% on sea and 18% by air. This tends to confirm the recovery of global trade. The margins of the company are however slightly under pressure. For SGS, organic growth is rather good at 3.4% over the semester. Like for K+N, margins are weaker than hoped for. Swatch confirmed the reversal of the watch market and had a growth of 1.2% over the quarter; its margins progressed as well. ABB publishes a modest performance: growth of only 1% and margins under pressure. Finally Givaudan published rather weak growth of 2.3%, while explaining that the comparison basis from last year was very high, which biases these figures. Good news is the improvement of volumes of its large clients, which had recently experienced difficulties in the emerging markets. This is promising for Nestlé, the heavy weight of Swiss companies.