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(Bloomberg) -- The Swiss National Bank gets flak for everything ranging from its investments to the strength of the franc. One group that can’t complain this year: its stockholders.

Since January the SNB’s shares have more than doubled in value, touching a peak of 3,825 francs ($3,980) on Sept. 14. With some 48 percent of the central bank’s total stock held by private shareholders with limited voting rights and no say on monetary policy, at first glance the increase is a bit bewildering.

According to Alexander Koch, an economist with Raiffeisen Schweiz and a former SNB shareholder, the only plausible explanation is that the stock is being traded as a proxy for a bond.

“With the franc depreciating, that makes it more likely that the SNB will pay a dividend and of course that boosts the yield,” he said. “Nothing terribly exciting, but still better than boring old government bonds.”

Yields on super-safe Swiss sovereign debt have dropped below zero, in part because of investor demand for a safe place to park their money. The SNB is using a deposit rate of minus 0.75 percent in a bid to maintain the interest rate differential with the euro area and take pressure off the haven currency.

Along with the likes of Greece and South Africa, the SNB is one of a handful of central banks with private shareholders. The Swiss central bank has a market cap of 375 million francs and its dividend payout is limited. In the past decade was 15 francs a share every year except 2014, when the central bank scrapped the dividend as well as the profit distribution to the federal government and cantons following a loss.

Switzerland’s cantons and cantonal banks are the biggest holders of SNB equity. As of the end of last year, there were 2,188 private shareholders, with German businessman Theo Siegert owning a 6.72 percent stake.

A spokesman for the SNB declined to comment on the share price increase.

While the stock has risen, trading volume remains muted. An average of 112 shares per day have changed hands since the start of the year. Still, that compares with 101 in 2016, 58 in 2015 and 44 in 2014.

--With assistance from Jones Hayden Marcus Bensasson and Richard Jones

To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Zoe Schneeweiss, Craig Stirling

©2017 Bloomberg L.P.

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The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.

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