Home » Economy » Mojmir Hlinka – «The economic Sitaution is better than the mood on the stock exchanges» News

Mojmir Hlinka – «The economic Sitaution is better than the mood on the stock exchanges» News

Thursday, September 14th, 2017 | Economy

North Korean killing, US President Donald Trump's unfulfilled election promises, overvalued stocks: Many risk factors are currently unsettling investors and preventing them from buying stocks. Quite a few investors have also put the profits they have earned with well-run stocks. This is quite understandable. The Dow Jones index, the standard in the US, has risen from almost 13,000 points to more than 22,000 meters since November 2011.
"No question, there are currently many uncertainties in the markets," says Mojimir Hlinka, CEO of the asset manager Agfif in Zurich, in the cash exchange talk. "On the other hand, we also have very positive impulses". He therefore means the positive economic development in Germany, the euro area, China as well as the surprisingly good half-year figures, especially in the USA. By the end of July, for example, the company figures published in the US had exceeded expectations by about 80 percent.
According to Hlinka, these facts are too little present in the minds of the investors. "The economic situation is better than the sentiment on stock exchanges", and this is a very clear indicator that the stocks are not overpriced and the stock exchanges are not over priced. Hlinka is convinced: "The uncertainties will be reflected in temporary corrections on the exchanges, but will not have an effect on the overall market." At the Swiss Market Index (SMI), Hlinka expects a level of up to 9500 points from the current level of almost 9,000 by the end of the year.
"Interest rate will remain low for a very long time"
However, the European Financial Market Supervisory Authority (ESMA) has warned investors this week with unusually keen words about risks on the financial markets. The prices for many investments are "at the highest level" due to various uncertainties. The greatest risks included uncertainties related to brexit and political developments in the US.
"The financial market here is obviously a responsibility," says Hlinka, but does not attach any importance to the statements made by the supervisory authorities. The low level of interest rates contained a certain lack of alternatives in the investments. And the valuation of stocks could hardly be measured or compared in such times, says Hlinka. "The interest rate will remain low for a very long time".
Hardly any other stock market index symbolizes the indecisiveness of investors like the SMI. The leading index has so far risen by 10 percent in the course of the year, but the profit manifested itself above all in the first months of the year. Since May the index has fluctuated around the mark of 9000 points and hardly ever comes from the spot.

Only one SMI share is in the negative this year. The performance of the reinsurer Swiss Re is 10 percent negative this year. The company suffers from price erosion in the reinsurance business and under increasing competition from the primary insurance sector. Competitor Munich Re also announced two days ago that high insured losses are to be expected due to the recent storms, especially in the USA, and the profit target for the current year is therefore at risk.
"Market psychology is also playing here," says Hlinka about the shares of Swiss Re. "There are uncertainties, and Swiss Re is unpredictable natural disasters, but that is part of the business model," says Hlinka. The company is strategically very well positioned and has always had a dividend yield of 4 and 6 percent in the past. "The share belongs to every depot," says Hlinka. Some market players are of the opinion that classic dividend titles such as Swiss Re or Zurich could be re-established some months before the disbursements of the distributions on the stock exchange.
For the Euro / Franc currency pair, Hlinka holds a price of 1.25 to 1.30. "But that will last." For as long as the European Central Bank does not raise interest rates, the Swiss National Bank is tied hands. A separate Swiss interest rate increase would probably lead to a strong appreciation of the Swiss franc. A first rate step will therefore not be made before the end of 2019, say the experts of Capital Economics. Hlinka itself at the Eurokurs for the time from a sideways movement with slight upward tendency.
In the cash exchange talk, Mojmir Hlinka is also commenting on Apple's stock and Bitcoin.


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