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Traders to focus on Swissair restructuring

Swissair's future could very well be decided this week Keystone

The next week will see continued pressure on the Swissair Group, which suffered from heavy selling pressure on the stock exchange through the previous week. Also on offer over the next five trading days will be a clutch of fresh Swiss economic indicators.

Traders will certainly be looking for any news of more restructuring at the debt laden Swissair Group after its chief executive Mario Corti admitted last week to debts of between SFr16-17 billion ($10.0-10.7 billion).

After he made a key announcement on the merger of Swissair and its regional airline unit, Crossair, last week, traders will be keen to see more rationalisation measures at the company.

Also of interest will be the parliamentary debate on Swissair’s future scheduled for Thursday.

Economic news is being more keenly awaited than ever in the wake of the September 11 attacks in the United States.

Last week saw a raft of banks step in to downgrade their Swiss economic forecasts as they believed the US would suffer a downturn in consumer confidence, which would in turn hit the European economies.

Most important of the upcoming figures will be the Swiss Business Cycle Institute’s (KOF) economic forecasts due for release on Thursday.

Expectations are that the KOF will cut back its forecast for economic growth in 2002 in line with similar moves at UBS Warburg and Credit Suisse.

Starting the week off will be the Swiss Purchasing Managers Report on Monday. This survey of business confidence will no doubt be affected by the fall-out of the terrorist attacks in the US.

Unemployment figures

Unemployment figures

Friday will see the release of the latest unemployment data for September. In August the jobless rate came in at 1.7 per cent, however economists expect unemployment to climb to between 2.2 and 2.5 per cent over next year as the export industries cut back as US and European demand decreases.

A quiet week awaits on the corporate front with no major blue chip companies scheduled to release data. However, the Swiss franc will remain in focus after seesawing its way through the previous week.

The franc started last week in a strong position against the dollar and euro as its safe haven status attracted foreign exchange dealers.

But by the end of last week the dollar was once more recovering after the Swiss National Bank cut interest rates by half a basis point. Expectations are for continued downward pressure on the franc to continue through the coming week.

by Tom O’Brien

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR