M&A (mergers and acquisitions) activity is on the rise, as companies coming out of the pandemic with strong balance sheets shop for buying opportunities. Last week ACS, a Spanish construction group, approached Italian transport company Atlantia to buy Italy’s largest motorway network. Two big funds are also eyeing Dutch telecommunications company KPN as a potential acquisition target. M&A is one of our 2021 investment themes and we like event-driven hedge funds for this play. The European covid vaccination effort is picking up speed and at the current rate, the European Commission’s target of a 70% vaccination rate by September is within sight. This improved outlook seems to be shared by markets, as the European 5y5y inflation swap has reached its highest level
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M&A (mergers and acquisitions) activity is on the rise, as companies coming out of the pandemic with strong balance sheets shop for buying opportunities. Last week ACS, a Spanish construction group, approached Italian transport company Atlantia to buy Italy’s largest motorway network. Two big funds are also eyeing Dutch telecommunications company KPN as a potential acquisition target. M&A is one of our 2021 investment themes and we like event-driven hedge funds for this play.
The European covid vaccination effort is picking up speed and at the current rate, the European Commission’s target of a 70% vaccination rate by September is within sight. This improved outlook seems to be shared by markets, as the European 5y5y inflation swap has reached its highest level since December 2018 and European equities have outperformed their US counterparts so far this year. Meanwhile, Italy’s prime minister Mario Draghi announced that his government recently blocked the Chinese takeover of an Italian semiconductor company. This signals that state interventionism is likely to remain as governments move to protect strategic sectors.
Last Monday’s Federal Reserve meeting yielded dovish comments that put the US dollar on pause and stabilised the gold price. We will be watching inflation numbers this week. In US politics, House Speaker Nancy Pelosi is pushing for approval of the proposed infrastructure plan by August, with room for negotiations on the proposed corporate tax hikes at 25% rather than the 28% initially proposed. For the taxation of multinationals, last week the US put forward to the OECD a global minimum tax proposal based on location of sales. This would bring stabilisation to the international tax system as it attempts to halt the rise of digital taxation and tax avoidance practices. This week kicks off the Q1 earnings season with markets expecting solid earnings growth. We will need a healthy beat and improved outlook to maintain the current momentum, given that markets have already done quite well. Volatility is now back to pre-covid levels. Portfolio protection has become cheap again.
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2021-04-12
Update April 12 2021: SNB selling euros and dollars. Sight Deposits have fallen: The change is -0.5 bn. compared to last week, this means the SNB is selling euros and dollars.
House View, April 2021
2021-04-06
We believe that robust earnings growth will overcome concerns about rate increases. Within a neutral position on developed-market equities, we believe sectoral rotation will continue and we remain overweight cyclical markets like the UK and Japan. But while we believe the attractiveness of stocks subject to wild valuation swings will fade, we continue to like cash-rich ‘structural grower’ stocks.
Average annual inflation rate for residential property in 2020 was 2.5 percent
2021-02-16
16.02.2021 – The Swiss residential property price index (IMPI) increased in the 4th quarter 2020 compared with the previous quarter by 2.3% and reached 103.1 points (4th quarter 2019 = 100). Compared with the same quarter of the previous year, inflation was 3.1%. The average annual inflation rate for residential property in 2020 was 2.5%.
Switzerland Construction prices fell by 0.2 percent in October 2020
2020-12-18
The construction price index recorded a decline of 0.2% between April and October 2020, reaching 99.7 points (October 2015 = 100). This result reflects a decline in building prices and a slight growth in civil engineering prices. Year on year, construction prices remained stable.
Swiss Trade Balance October 2020: foreign trade falters
2020-11-19
In October 2020, Swiss foreign trade took off. In seasonally adjusted terms, exports stagnated (-0.4%) while imports fell 3.3%. The slowdown recorded since this summer in both directions of traffic has thus been confirmed. The trade balance closed with a surplus of 2.9 billion francs.
House View, November 2020
2020-11-10
The upsurge in covid-19 cases will likely hurt global economic prospects in the current quarter. With a Democrat ‘blue wave’ failing materialise in the US elections, hopes of a substantial spending bill have faded and there is risk that US household incomes suffer as existing support measures fade. In the meantime, covid-19 infections continue surge in the US.
Switzerland Unemployment in October 2020: remained at 3.2percent, seasonally adjusted fallen to 3.3percent
2020-11-09
Registered unemployment in October 2020 – According to surveys by the State Secretariat for Economic Affairs (SECO), 149,118 unemployed people were registered with the regional employment centers (RAV) at the end of October 2020, 558 more than in the previous month. The unemployment rate remained at 3.2% in the month under review. Compared to the same month last year, unemployment increased by 47,434 people (+ 46.6%).
Weekly View – A sure thing
2020-10-27
Signs from last week’s SURE programme to finance partial unemployment schemes are highly encouraging for the EU’s plans for recovery fund issuance which could start, we believe, in mid-2021. Last week’s SURE issue was close to 14 times oversubscribed at a rate lower than that for French government bonds of comparable duration.
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