Monday, January 7, 2008

Defensive stocks from Switzerland.

Yesterday I mentioned my investing strategy for current volatile market, putting money to defensive dividend stocks.And those companies are today's winners. GlaxoSmithKline (GSK) was leading gains in London with +3.5%. Swiss market index SMI closed negative nevertheless large pharmaceutical and food caps were still attractive. Nestle (NESN.VX) +2.19%,Roche (ROG.VX) +1.11% and Novartis (NVS) +1.15%. Investment in Swiss market can be wise choice. Economy seems headed for its forth straight year of above trend growth. GDP for 2007 2.5% and outlook for 2008 is 2%. Risks for price stability remain on upside. In context of lowering rates in US and Euro zone Swiss Franc should strengthen against both major currencies. This will bring you additional value for your investment. Franc is not seen as a funding currency for carry trades as it was in past. Switzerland continues to retain status as a safe heaven in recent sub prime mortgage crisis.

There are two ETF on AMEX. iShares MSCI Switzerland Index (EWL) underlying mostly 3 caps I was writing above. And second is CurrencyShares Swiss Franc Trust (FXF).


5 Responses to "Defensive stocks from Switzerland."

2and20 said... January 9, 2008 at 7:58 PM

just stumbled across your blog as i was looking at the strength of the czech krona. any view on shorting the krona against going long maybe swiss franc. thinking i want to be short currencies that have large current account deficits, which seems to include most of eastern europe.

fyi i know nothing about the czech economy!


Vlada, Czech Republic said... January 9, 2008 at 8:24 PM

I wouldn't short Czech koruna from long term perspective against USD or EUR. Last economic numbers show that inflation has still upside risk as it is out of National bank target range. Also lower flat taxation could make assets more attractive.

Vlada, Czech Republic said... January 9, 2008 at 8:31 PM

Btw. I share your opinion about GBP/AUD. Also I like CHF as I mentioned in my post about Switzerland.

2and20 said... January 9, 2008 at 8:50 PM

cool, thanks for the quick reply! i'll try looking elsewhere, maybe hungary.

yeah i just tookm the GBP/AUD off cos i couldnt resist a quick 3 points, but i plan to get back in it. Swiss France is gonna be a winner against a number of currencies this year also.

I warn you though I'm usually a terrible fx trader! but having a good run lately.

Vlada, Czech Republic said... January 9, 2008 at 9:15 PM

Hungarian economic growth is in the slowest pace among CEE markets which could explain HUF/EUR rate comparing CZK and PLN against EUR. Turkish lira (TRY) was nice bullish play recently. Country attracted attention by economic rebound and as well as high interest rate