2 October 2015 – Weekly Swiss and global market roundup.
Brought to you by Investec Switzerland.
Swiss market news
Markets end worst quarter in four years
Despite equity markets biggest surge in three weeks, global equity markets headed for their worst quarter since 2011 with investors rattled by China’s economic slowdown, uncertainty over Federal Reserve policy and growing pessimism about corporate earnings. The Swiss Market Index recovered from its losses early this week and outperformed global equity markets significantly led by its defensive heavyweights Nestlé and pharmaceuticals but also cyclical financials…. Read more.
Swiss company news
Glencore’s shares plummet after analyst note
On Monday three analysts from the bank and asset manager Investec issued a note that sent shock waves through the mining industry. According to the Financial Times, the worst affected company was the Zug-headquartered Glencore, which saw its shares plummet 29% on the London Stock Exchange. Some in the industry had never seen anything like it before, including the Investec analysts who issued the note. Read more.
Switzerland bans Volkswagen sales
On Friday the Swiss Federal Roads Office issued a ban on the sale of certain models of Volkswagen cars in Switzerland. The ban covers all unsold cars that might have devices that can fool emissions tests. According to OFROU calculations, as many 180,000 vehicles might be affected. The ban includes Volkswagen, Audi, Skoda and Seat cars made between 2009 and 2014 with 1.2TDI, 1.6TDI and 2.0TDI diesel motors. Cars with Euro 6 emission category standards are not included, nor are cars already on the road. OFROU has set up a team to fully investigate the issue and identify exactly which cars are affected. Switzerland is the first country to issue such a ban. Read more.
Nestlé SA – (NESN VX) – Nestle braves Russian recession to fuel coffee sales growth
Nestle SA, the world’s biggest food maker, sees Russia as one of the most promising markets to expand its industry-leading coffee business despite a squeeze on consumer spending caused by plunging oil prices and the ruble’s devaluation. Russians are increasingly turning to single-serve varieties, a pattern also seen in eastern European countries like Turkey, Nestle’s European chief Luis Cantarell said in an interview in Geneva. Nestle’s Russian sales will increase about 15 percent this year in local currencies, estimates Jean- Philippe Bertschy, an analyst at Bank Vontobel AG in Zurich. The company needs that growth as other emerging markets such as India and China have slowed. By Corinne Gretler (Bloomberg). Read more.
LVMH’s Biver sees more difficult 2016 for Swiss watch makers
LVMH watch chief Jean-Claude Biver said 2016 is set to be a tougher year for the Swiss watch industry because of the economic slowdown in China. While revenue at LVMH brands such as Hublot should continue growing at a double-digit rate in 2015, “the problem might be next year,” Biver said in an interview Tuesday with Bloomberg Television. “Not only for us, but also for the whole industry.” The introduction of Apple Inc.’s smartwatch, combined with a surge in the Swiss franc and China’s slowing economy, have clouded the outlook for Swiss timepieces. Exports fell in August, heading for the first annual decline in six years, and Swiss watchmaker executives are the most pessimistic in four years, according to a study published this month by Deloitte LLP. By Andrew Roberts (Bloomberg). Read more.