Many in Switzerland's business community were rattled this week by the news of a merger between the London and Frankfurt stock exchanges, although the Swiss market denied the new mega-bourse would leave Zurich out in the cold.
After a quiet day on Monday, due to the May Day public holiday, it turned into a busy week for Swiss business.
- Tuesday kicked off with a nurses' strike in canton Zurich, when 4,000 nursing staff at more than 20 hospitals, clinics and homes took part in a three-day industrial action programme. Staff were demonstrating against nursing shortages and low pay.
- The same day the Swiss National Bank started its programme to sell excess gold reserves. It intends to place a first tranche of 120 tonnes of gold on the market by the end of September. In total, it plans to get rid of 1,300 tonnes of gold.
- Also on Tuesday, the Swiss Purchasing Managers' Index rose to a seasonally adjusted 66.2 in April from a revised 63.0 in March. A value above 50.0 shows the manufacturing sector is expanding.
- On Wednesday came the news that the London Stock Exchange and Frankfurt's Deutsche Bourse were to merge, creating a European mega-bourse, which is also to include a tie-up with the technology-laden US Nasdaq stock market. However, the Swiss bourse remained decidedly out in the cold, joining neither the London Frankfurt axis nor the Paris, Amsterdam, Brussels alliance. Leo Hug, spokesman for the Swiss Stock Exchange, said, "We have our options and we have our strategy, and we will communicate this as and when we have news."
- On Thursday, news broke that the Swiss financier Ernst Müller-Möhl had been killed when a small plane he was flying alone crashed in south-eastern Switzerland. Aged 43, he founded the A and A Aktienbank, and vied with Martin Ebner for the title of Switzerland's top private financier.
- Also on Thursday, Swiss pharmaceutical group Roche set up a research fund at the Federal Institute of Technology in Zurich to promote research in molecular and structural biology. The fund, which will provide start-up financing of SFr2.5 million, spread over a period of five years, will make it easier for the Department of Biology to recruit top researchers to fill the five assistant professorships in its pool.
- Friday saw results from the Swiss Federal Railways. A year after privatisation, the operator announced annual profits of SFr120 million for 1999. Passenger numbers increased four per cent with ten per cent more freight carried. Staff are to receive a bonus of SFr1,000 each.
- The same day, S-AirGroup, owner of Swissair, looked to a clearer field in the French market. One of its partners, French group Taitbout Antibes, spent SFr125 million buying out British Airway's majority stake in loss-making French domestic airline Air Liberté. Taitbout is a subsidiary of Marine Wendel and Group Alpha which, together with the SAirGroup, own the French airline AOM and also possess a stake in another French domestic airline, Air Littoral.
- Also on Friday, the Swiss Institute of Business Cycle Research's leading indicator rose to 1.63 in March from 1.54 in February. This, according to the Institute, points to a higher level of economic growth at least until the third quarter of this year.
Finally, on the currency markets, the Swiss franc hit all time highs against the euro, as traders saw the economy here performing better than that of Euroland. The franc also recovered from an 11-year low against the US dollar, as dealers moved into the franc rather than the euro. However, the dollar held on as king of the currency castle, leading analysts to warn that another rise in US interest rates was imminent.
by Tom O'Brien