13 November 2015 – Weekly Swiss and global market roundup.
Brought to you by Investec Switzerland.
The SMI under performed global stocks this week and is expected to finish in negative territory on Friday. Fears that further quantitative easing by the European Central Bank (ECB) will weaken the Euro and undercut the competitiveness of Swiss exporters weighed on investor sentiment while China’s slowing growth remained a headwind.
Global investor sentiment received a further setback this week after the OECD slashed its global economic outlook for 2016, reflecting subdued trade growth amid China’s economic slowdown. As other emerging markets weaken further, the OECD now expects the global economy to grow 3.3% next year, down from 3.6% in its September forecast. Switzerland’s economy is set to expand 0.7% in 2015 (previously 0.8%) and to grow only 1.1% in 2016 versus 1.7%. On Tuesday, a report showed that Switzerland’s seasonally adjusted unemployment rate remained unchanged at 3.4% in October and matched expectations. The Federal Reserve’s interest rate hike schedule, remained a key driver of sentiment this week. Equity markets came under pressure again after the odds that the Fed will hike interest rates in December climbed to 68% on the back of last Friday’s strong jobs data.
In company news, the week’s worst performer was Richemont, the maker of Cartier jewelry and Vacheron Constantin timepieces. The company forecast a challenging end to the year after sales unexpectedly declined in October. The stock fell as much as 8.5% on a weekly basis.
This Friday morning, Syngenta shares gained more than 10%. China National Chemical Corp. is in talks to buy the Swiss pesticide maker in what would be the largest acquisition by a Chinese company of a European target, people with knowledge of the matter said. According to Bloomberg, the firm offered about 449 francs a share, which is around 30% more than the price on Thursday evening (345.90 francs). Syngenta apparently rejected that offer, citing regulatory risk.