Tuesday, 19 March 2024 Reading time : 2 minutes

In recent weeks, stock market activity has been dominated by companies' quarterly and annual results. Now, calmer times are ahead. In Switzerland, 18 of the 20 SMI companies have reported their results so far. At the index level, a solid but unspectacular result is emerging for the full-year 2023. The aggregated sales and earnings figures of the SMI members have risen slightly year-on-year, according to an interim report by ZKB Research. The results were in-line with market expectations. Looking at individual companies, however, 2023 was anything but boring: UBS acquired rival Credit Suisse in March, Sandoz ventured into the stock market and Lonza suffered a severe setback. 

UBS: Following the takeover of Credit Suisse, whose collapse marks its first anniversary this Tuesday, UBS is the undisputed number 1 in the Swiss banking. According to Bloomberg, the bank's total assets amounted to around USD 1.7 trillion. This is more than twice the size of Switzerland's gross domestic product. At the beginning of February, UBS reported its second set of results that fully included its acquired rival. While a loss was reported for the last quarter, a record profit of USD 29 billion resulted for the full year. However, these results are heavily influenced by the CS acquisition, which will continue to affect the combined bank. UBS CEO Sergio Ermotti said that integration costs are likely to weigh on results in 2024 and spoke of a difficult year ahead. Nevertheless, shareholders will benefit from a higher-than-expected dividend. After initial losses after the publication of earnings, the shares have been on the rise since mid-February. The stocks recently climbed to their highest level in almost 16 years, having gained more than 60% since the Credit Suisse acquisition.

Sandoz: Generics specialist Sandoz celebrated a premiere in mid-March and published its first annual results as an independent company after the spin-off of Novartis in early October. The first results were mixed. However, in the high-margin biosimilars business, where Sandoz claims to be a market leader, the company posted strong growth of 15% over the previous year. Investors remain cautious for now. Sandoz shares have risen about 16% since the IPO. They peaked at just under CHF 30.00 at the end of January and have since lost about 5.5%.

Lonza: Pharmaceutical supplier Lonza is on the rise after reporting better-than-expected results for 2023 following a string of bad news last year. The shares of the Basel-based group have gained more than 34% since the beginning of the year. However, they have not yet recovered from the setback caused by the termination of coronavirus vaccine production for US biotech group Moderna.

The Barrier Reverse Convertible on UBS, Lonza and Sandoz has a barrier of 60% and thus provides partial protection against price setbacks. The annual coupon of 9% is paid regardless of the performance of the underlying securities. 

 

Disclaimer
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