Home » Economy » Monetary policy change – Does the SNB soon sell the first stocks? | News

Monetary policy change – Does the SNB soon sell the first stocks? | News

Tuesday, August 22nd, 2017 | Economy

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Over the past few years, the two stock markets dominated the American stock market: on the one hand, the companies there had over billions of billions of share buyback programs, and on the other hand the foreign central banks, above all the Swiss National Bank (SNB). Finally, the foreign exchange reserves swapped to 714 billion Swiss francs will be invested as profitably and broadly as possible.
Once every quarter, the Swiss currency managers of the US stock exchange supervisor SEC must submit a list of stocks, which is then made available to the public. At the end of June, the SNB held American stocks with a total value of over 80 billion dollars in the books.
The SNB is now one of the most important shareholders of Facebook, Apple and other US large companies, who have been a thorn in the eyes of politics in Washington for quite some time.
This even gave Switzerland a place on a black list of countries created by the US Treasury Department, who are accused of keeping their currency artificially low. This list also includes our northern neighbor Germany.
Not only from the federal states, but also from abroad, the pressure on the SNB managers is increasing, finally, a more restrictive monetary policy course. Easier said than done.
The economists of the US bank Citigroup, who had settled in London, reveal how such a change of course could look like. In a commentary told me from Geneva, they also look to the SNB from the last weaker franc.
The authors consider the return on negative interest unlikely, but not a reduction in the balance sheet. In connection with bonds due for repayment, they consider a monthly reduction of foreign exchange reserves of up to 5 billion Swiss francs as conceivable.

EUR / CHF (red) in one year comparison with the USD / CHF (green) (Source: www.cash.ch)
In order to maintain the existing ratio between fixed-income and shares, the SNB would then also have to separate the first parts of its 144 billion Swiss francs stock.
With regard to the pioneering monetary policy decisions of the European Central Bank (ECB), the economists at Citigroup do not expect any change in the course of the SNB's monetary policy assessment of mid-September. It is interesting to note that from the spring of 2019 the American investment bank is expected to start with a first interest rate increase by the ECB. From then on, an interest rate step could also become a topic for us in Switzerland.
With currency reserves of 714 billion Swiss francs in the balance sheet, the monetary policy change will be a tightrope for the SNB. For if she does not proceed very cautiously, the franc threatens again strongly.
Hardly a day passes without a pessimistic stock analysis in Switzerland throws the towel in Switzerland. Today it is even their two …
After the solid pound of last week, the medical technology analyst who works for Kepler Cheuvreux raises the shares of Straumann from "Reduce" to "Hold". Taking into account the acquired ClearCorrect and the potential growth opportunities it opens up, the company has revised the price target to 594 (previously 485) Swiss francs.
This puts pressure on their three professional colleagues from J.P. Morgan, Citigroup and Goldman Sachs, also to consider their sales recommendations. Merrill Lynch, the company's insurance analyst, is now showing how Swiss Life's shares are heading up from "Underperform" to "Neutral" with a price target of 355 (previously 345) Swiss francs. And this, after his predecessor and he had the papers since the beginning of August 2015 constantly for sale had recommended.

Two Swiss Überfllieger: The shares of Swiss Life (red) and Straumann (green) (Source: www.cash.ch)
The turnaround has been successfully completed, so the American investment bank is seen. Regarding the future dividend policy, she even tells the life insurance company from Zurich even a positive surprise potential.
With the British HSBC, today only one bank has a sales recommendation for the Swiss Life shares outstanding. It is possible that she is also forced to her knees.
If analysts suddenly reconsider with partly threadbare arguments of multi-year sales recommendations (see also the column of the 26th July), makes me quite stupid. Because we all know: the stock market lives by different opinions.
The cash insider records and interprets market rumors as well as strategy, industry or corporate studies. Market rumors are deliberately not checked for their truth content. Rumors, speculation and everything that traders and market participants are interested in should be passed on to the readers quickly. No responsibility is assumed for the correctness of the contents. The personal opinion of the cash insider does not have to coincide with that of the cash editorial department. The cash insider itself is active on the stock market. This is the only way to reach the necessary market proximity for this kind of news. The opinions expressed do not constitute any recommendation to buy or sell to the reader.


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