The M&A market underperformed in the second quarter of the year across all regions, with no mega deal of over $10 billion completed for the first time in five years. According to André van Hooren of Willis Towers Watson, Deutsche Bank and other banks that have recently considered mergers are going back to basics and “redefining their core” in order to adapt to changes in the industry.
Alarm arose inside the U.S. financial system this week after a spike in demand for short-term liquidity led the Federal Reserve to intervene in the repo market. The cash crunch can’t compare to the one that aggravated the financial crisis in 2008, says Tony Campione, investment advisor at Julius Baer in Geneva. But he sees a clear need for the Fed to reassure markets, possibly with a fresh round of quantitative easing.
Since the last quantitative easing round, regulations blocking the ECB from buying negative-yielding corporate bonds has been lifted, paving the way for the central bank to do so as part of its newly announced 12 BN euro bond purchasing program, says M&G Investment’s Wolfgang Bauer.
While the Swiss government slashed its 2019 growth forecast on Tuesday to 0.8 percent, down from 1.2 percent in June, it is still expecting gross domestic product to expand 1.7 percent next year. That sounds optimistic, according to Johan Utterman, head of Swiss equities at Lombard Odier IM. He says the economy may struggle to rebound next year without government support or a favorable end to the U.S.-China trade war.
Zurich-based Numbrs is the latest Swiss start-up to join the unicorn club. Fynn Kreuz, managing partner of the fintech company, talks about expansion plans and why the Swiss firm does not yet offer services in Switzerland.
Attacks on major oil facilities in Saudi Arabia have shaken up global oil markets. Giovanni Staunovo, UBS commodity analyst, sees difficult times ahead for economies and companies depending on oil imports. And for everyday consumers, he sees gas prices rising.
In a critical month for central banks, our top analysts have been divided on how the SNB should act on its monetary policy. Some push for cuts, others for more foreign exchange intervention. One thing’s for sure: Negative rates are here to stay and they continue to dominate the conversation.
The ECB’s decision to relaunch its bond purchasing program is “quantitative diseasing, not quantitative easing.” This according to Ken Fisher, investor and founder of Fisher Investments, who warns that the move will set back the European economy rather than support it.
Despite systematic problems and a negative interest rate environment, people should put savings in the pension system as early as possible, says Werner Rutsch, head of institutional business at AXA Investment Managers. A change in regulation will help people with higher incomes to decide on their investment strategy.
The European Central Bank announced a fresh stimulus package and cut its deposit rate by 10 basis points today, as it looks to support the eurozone economy. But this small adjustment, says Stefan Gerlach, EFG Bank chief economist, is likely to have a “minimal effect” for the SNB, bringing some relief ahead of its next meeting.
Swiss banks are feeling the pain from five years of negative interest rates. Swiss Bankers Association CEO Jörg Gasser says the organization will lead the debate to try come up with a sustainable solution. “They are approaching the limit,” says Gasser, “and therefore the question needs to be tackled very seriously.”
One in four Swiss don’t have a private pension plan yet many still want to retire early, according to a survey carried out on behalf of Raiffeisen. The findings, published Thursday, show it’s time to reform the country’s “rigid” three-pillar system, says Tashi Gumbatshang, head of asset and pension planning at the cooperative bank.
Activist investors are putting up a fight against Alpiq’s majority owners, holding onto the last remaining shares that would allow them to take the energy company private. Eugen Perger, senior analyst at Research Partners, warns that in the worst-case scenario, the impasse could lead to the issue having to be resolved in court.
The Swiss National Bank is a “prisoner” of the European Central Bank, says Rudolf Minsch, chief economist of economiesuisse. If the ECB delivers a deep-enough rate cut on Thursday, he adds, the SNB will have to follow suit—but there is a little wiggle room.
Libra asked for clarity and FINMA delivered. New guidelines are out for stablecoins as Facebook’s Libra currency tries to gain momentum in Switzerland.