1 July 2016 – Swiss and global market roundup.
Brought to you by Investec Switzerland.
Global equity markets are set to post gains this week as investors digest the impact of the UK’s historic vote to leave the European Union. Swiss stocks outperformed global markets as defensive heavyweights Nestlé, Roche and Novartis led gains.
Volatility remained high with markets rebounding from last week’s heavy losses as tensions began to ease following the UK referendum. Bargain hunters took advantage of badly beaten up sectors on bets that central banks would ride to the rescue of investors by providing additional stimulus to avert disaster. Mark Carney, governor of the Bank of England, reassured markets that a rate cut could come as early as this summer but also warned that there’s only so much the central bank can do to protect the UK economy. The FTSE 100 Index closed at its highest level since August 2014 after the pound sold off further, helping exporters and multinationals.
Annelise Peers, Chief Investment Officer of Investec Bank Switzerland joins CNBC Africa to discuss the Brexit vote fallout. Watch the interview below.
Elsewhere, final first quarter US GDP growth was revised slightly higher this week to 1.1% from 1%. According to economists, the lackluster figure is not enough to materially alter the economic outlook of the United States.
In Switzerland the release of the KOF Economic Barometer, which attempts to forecast Swiss domestic growth for the next 6 months, was reported above its historical average. The strength of the Swiss franc however remains a challenge for exporters.
In company news, Nestlé rose after investors responded positively to the surprise appointment of Mark Schneider as successor to Chief Executive Officer, Paul Bulcke. Schneider is the first outsider to be given the CEO job at Nestlé in almost a century. The appointment of Schneider, whose background is in the medical industry, supports Nestle’s goal to redefine itself as a scientifically-driven nutrition and health food company.