Swiss stocks join European surge in 2013

The SMI ended 2013 up 20% Keystone

The Swiss Market Index (SMI), representing the top 20 stocks quoted on the SIX Swiss Exchange, has had a strong year, ending 2013 just over 20% up, the best performance for the Swiss market in eight years.

Finishing its last day of business on December 30 at 8,203 points, the benchmark index reflected a broad rally across European markets with the German DAX up 25%, the French CAC-40 rising 17% and Britain’s FTSE increasing 14% on the year’s trading.

Even crisis-hit markets such as those in Ireland and Greece posted strong growth in 2013, 34% and 28% respectively.

Shares in Milan (+17%) and Madrid (+21%) also saw a rebound this year as the Italian and Spanish economies gradually recovered from the effects of the euro zone’s sovereign debt crisis. However, the value of stocks is still well below 2007 levels in most European markets.

Although the stock market rally still faces risks from factors such as a possible spike in bond yields or a rise in the oil price from civil unrest in the Middle East and Africa, traders expect the gradual recovery in the world economy to continue to support equities in 2014.

The New York Stock Exchange has a lot to celebrate, with spectacular performances across its indices. The Dow Jones ended the year up over 25%, the S&P500 (+29%) reached historic highs, while the technology-dominated Nasdaq, up 37%, is back up to year 2000 levels.  

Winners and losers

In the Swiss market, Zurich automobile components maker Autoneum achieved the most spectacular returns. The value of its shares tripled to CHF140 ($157) this year.

Firms active in research, such as Cosmo Pharmaceuticals (+172%) and Basilea (+135%), are among the shares progressing the most in 2013. Shares of the Basel-based biotechnology company Evolva also surged.

Some of Switzerland’s success is down to the mix of stocks on the market, according to Jon Cox, an analyst at Kepler Chevereux in Zurich.

“If you look at Swiss market there is a heavy overweight of healthcare and financial stocks and those sectors have both done well this year,” he told swissinfo.ch.

“Swiss stocks also benefit from perceived safe haven status, in that if you are investing in Swiss stocks you are also indirectly investing in the Swiss franc,” he added.

On the losing side, stocks of the Geneva laboratory Addex Therapeutics suffered a fall of 60%, while clothes retailer Charles Vögele had a bad year, down 35%.

The peak of the trading year came in May, when the SIX Swiss Exchange climbed to 8, 411 points.

Leading Swiss companies which finished the year flat include SGS (-0,25%), global leader in inspection and certification, elevator manufacturer Schindler (-0,3%), the cement firm Holcim (-0,5%) and Basel agro-chemical group Syngenta (-3,2%).

Crystal ball

Looking ahead to 2014, Cox predicts another “decent year for Swiss stocks, not as strong as we’ve seen this year but there will be ongoing improvement”.

“We probably will get some periods when there will be corrections but overall the market will end the year higher than it started,” he said.

Other analysts also see the rally slowing down in the year ahead. Raiffeisen’s chief economist was quoted in the Blick newspaper as saying the SMI could fall to 7,500 in the first half of the year but that it would end the year back at around 8,200 points.

The final word goes to the more optimistic Elmar Sieber of Basler Kantonalbank, who sees the SMI climbing to a record 9,100 points by the end of 2014.

SMI year to 30.12.13

Actelion +73.1%

Adecco +46.96%

Roche +35.43%

Geberit +34.31%

Julius Baer +32.51%

Givaudan +32.29%

Swatch Group +27.82%

Credit Suisse +25.96%

ABB +25.23%

Swiss Re +24.51%

Richemont +24.37%

Novartis +23.93%

Swisscom +19.58%

UBS +18.57%

Nestlé +9.56%

Transocean +7.68%

Zurich +6.2%

SGS +1.28%

Holcim -0.22%

Syngenta -3.11%