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The week in business

Urs Roth was chosen to succeed Niklaus Blattner.

(Swiss Bankers Association)

It was a busy week on the Swiss markets with news of a new chief executive at the Swiss Bankers Association, and a rescheduled date for the UMTS mobile phone licence auction.

On Monday the Swiss Bankers' Association named Urs Roth, currently head of legal affairs at Switzerland's largest bank, UBS, as its new chief executive. The 53-year old lawyer will replace Niklaus Blattner, who was recently elected to the board of the Swiss National Bank.

Roth's appointment came as something of a surprise as the Swiss press had mooted Switzerland's ambassador to Germany, Thomas Borer, for the post.

On Thursday the Federal Communications Commission announced that Switzerland's auction of third-generation mobile phone licences was to begin next Wednesday, after being called off at the last minute two weeks ago.

With just four companies bidding for the four licences, the auction is unlikely to yield anything close to the billions of francs in revenue that the federal government was hoping for. The Federal Communications Commission announced that the opening bids would remain at a set minimum of SFr50 million ($29 million) per licence.

Corporate results were another focus for market attention this week. Switzerland's biggest banking group, UBS, revealed strong third-quarter numbers, and said it was expecting a robust performance for the year as a whole.

Net profit in the third quarter at the world's sixth largest financial institution came in at SFr2.1 billion ($1.2 billion), up 73 per cent on the same period in 1999, but down slightly from the SFr2.2 billion seen in the second quarter of 2000.

Also reporting was Switzerland's largest telecommunications group, Swisscom. It warned that operating profits in 2000 would fall considerably, after they dropped 33 per cent in the third quarter to SFr1.6 billion ($905 million). However, the company said net profits would be slightly higher.

Trade news also made the business headlines as Switzerland's economics minister, Pascal Couchepin, signed a landmark free trade agreement with Mexico on behalf of the European Free Trade Association (EFTA) on Monday.

The deal is expected to benefit Swiss companies, which should make savings on import duties of around SFr100 million.

Economic news was also moving the markets over the week. On Thursday the government's method of calculating the inflation rate was changed, after predictions about consumer prices proved way off the mark.

Revisions to the way the Swiss consumer price index was calculated resulted in a headline inflation rate for November of just 1.9 per cent year-on-year, according to the Federal Statistics Office, well below analyst' forecasts of 2.5 to 3.0 per cent.

by Tom O'Brien

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