Swiss Market Index Sees Gains, But Don’t Get Too Comfortable

The Swiss Market Index (SMI) has finally seen some life, with a small but significant gain in recent days. But let’s not get ahead of ourselves here - this is no cause for celebration. The SMI’s rise is largely due to a single factor: Partners Group, a Swiss investment firm, has seen a jump in total assets under management. This is a classic case of a single player propping up the entire market.

But what about Geberit AG, the Swiss company behind the water supply and drainage systems that have been quietly contributing to the SMI’s growth? Their stock price has indeed seen a boost, with shares rising in recent days. However, this is not a story of a company’s success, but rather a reflection of the broader market’s cautious optimism.

The Numbers Don’t Lie

• Geberit AG’s stock price has risen, but only marginally. An investment of 100 CHF in 2022 is now worth around 130 CHF - a paltry 30% return.
• The SMI’s gain is small, but significant. However, this is largely due to Partners Group’s performance, rather than any fundamental shift in the market.
• The market’s performance is still cautious, with ongoing trade war fears and concerns about interest rates holding back investors.

Don’t Get Too Comfortable

The SMI’s gain is a welcome respite from the market’s recent woes, but it’s not a reason to get too comfortable. The underlying issues that have been plaguing the market for months are still very much present. Trade war fears and concerns about interest rates are still major concerns, and investors would be wise to remain cautious.

In short, the SMI’s gain is a small step in the right direction, but it’s not a reason to celebrate just yet. The market is still a long way from recovery, and investors would be wise to remain vigilant.