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Stock market boom fuels household wealth

The stock market boom has helped fill the Swiss shopping basket

(Ex-press)

The Swiss cashed in on the stock market boom last year as average wealth per person soared to SFr167,000 ($150,000), after debts were stripped out.

Total net assets for households across the country rose SFr93 billion to SFr1,261 billion - fuelled by rising share prices and the performance of pension funds, according to Swiss National Bank (SNB) statistics.

Debt, mostly in the form of mortgages, also rose by SFr26 billion to SFr604 billion but this was outstripped by the increase in assets (up SFr119 billion to SFr1,865 billion).

Most Swiss people invest more in shares and other financial instruments than their European counterparts. In 2003, the average value of such assets per person was nearly three times that in Britain.

And such relatively high share holdings paid off last year with three-quarters of rising wealth attributable to capital gains. The Swiss Performance Index, a leading indicator of Swiss shares, climbed 21 per cent in 2006.

More than 42 per cent of stocks are held indirectly in the form of pension funds and insurance schemes. The excellent performance of such institutions added an extra SFr39 billion to households last year, taking this proportion of wealth to SFr794 billion – some 43 per cent of total assets.

But such a high exposure to financial markets could have a negative effect if share prices fall in future, SNB spokesman Jürg Bärlocher told swissinfo.

"Swiss households are more exposed to the markets. Shareholdings are high in Switzerland and the Swiss market was relatively volatile in the past few months," he said.

No debt problem

Earlier this year credit management group Intrum Justitia warned that Switzerland was sinking deeper into debt with unpaid bills to companies climbing to SFr9 billion. The organisation added that the Swiss were turning into a "credit-driven society".

But the SNB figures paint a less dramatic picture and Bärlocher believes debt levels remain stable. Some 90 per cent of household debt took the form of mortgages last year, the statistics show.

"I do not see much debt due to consumer credit. It is a relatively small portion of the overall debt," he said.

The Swiss also proved to be good savers last year, depositing nearly a quarter of their assets in banks and post office accounts.

The rise in household net financial assets (minus debt) was not quite as spectacular as the SFr118 billion increase between 2005 and 2006.

swissinfo, Matthew Allen

Key facts

Comparison of the average value of shares held per person (2003):
Switzerland €29,997 (SFr49,173)
Britain €10,696
Germany €10,650
France €11,729
Sweden €16,360
Belgium €19,791
Austria €6,089
US €43,273

end of infobox


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