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Swiss markets await US election result

The outcome of the US presidential election could have major implications for Swiss industry. Analysts say exporters should be rooting for the "pro-business" Republican candidate, George W Bush, rather than his Democratic rival, Al Gore.

The election result may still be in doubt, but there is no question where the markets' loyalties lie. Analysts say business leaders in Switzerland are or should be firmly behind Bush, who has emerged as a champion of free trade.

Gore, by contrast, is been seen as the "interventionist" candidate - a terminal affliction in the view of the markets.

One reason, says Zurich cantonal bank analyst, Hans Jürg Schmidt, is Gore's stated declaration that business might need to be reined in. "Gore tends to feel more pressure by interest groups favouring protection, while Bush is rather determined to support free trade."

Such sentiments are seen as potentially threatening by Swiss-based multinationals, which worry that a Gore victory would lead to greater regulation.

Among the sectors Gore has identified are pharmaceuticals - a concern for Basel-based giants Novartis and Roche, Schmidt told swissinfo.

"Gore said that these sectors might need some stronger regulation on what to sell, to whom and at what price. For Bush this is not a big issue, he is rather more on the deregulation side.

"If Gore increased regulation on the pharmaceutical sector, Swiss pharmaceutical groups would see a decline in their sales as well," he adds.

Another concern for Swiss exporters is that a Gore victory would bring down the value of the dollar - currently at a 14-year high against the franc - making Swiss exports less competitive.

Schmidt says the markets' preference for Bush means a Gore victory would likely lead to a slight downturn in the stock market, prompting investors to sell off some of their dollar holdings.

"In recent years the dollar's upward trend kept Swiss products cheaper," he says. Should this trend change because of an Al Gore victory, things will be made more difficult for Swiss firms selling into the US."

However, Schmidt says that whoever wins the affect on the stock market is likely to be small, at least in the short term.

The reason is that the president's effectiveness in determining economic policy is dependent on Congress going along with his proposals.

A Republican dominated Congress, as at the moment, would severely curtail any "interventionist" leanings by a Gore administration.

Moreover, the markets are unlikely to lose confidence as long as the chairman of the Federal Reserve, Alan Greenspan, remains in his post.

He is largely credited with America's continued economic expansion, and his departure could have more of an effect on the US economy, and those of its trading partners, than any change of political leadership in the White House.

swissinfo with agencies

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