Swiss stocks are not finding buyers, even after their declines this year pushed the cash reward for owning them to a record compared with government bonds.
This year’s fall in financial companies and concerns about a strong franc have made the Swiss Market Index one of the biggest losers on developed markets.
That has pushed the dividend yield of its firms to 3.7%, near a record relative to rates on the country’s 10-year government bonds, now in negative territory.
Still, investors remain bearish.
They have withdrawn money from an exchange-traded fund tracking the benchmark for the past five weeks. Gone are the days when the nation’s shares were seen as a haven.
Concerns about Europe’s ailing banking sector — Switzerland’s Credit Suisse and UBS included — and economic woes in key export markets such as China have taken their toll.
And while Swiss National Bank president Thomas Jordan said this week further easing was possible to take pressure off the franc, Mirabaud Securities’ John Plassard is sceptical.
“There are more important things than dividend yields at the moment — in Switzerland there is still the risk of a strong Swiss franc,” said Mr Plassard.
UBS and Credit Suisse have fallen more than 25% this year on worries about the impact of record-low interest rates on profits.
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