ZEW-CS Financial Market Test Switzerland - Increasing Optimism

According to the Financial Market Test Switzerland, carried out by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS), economic expectations continued to brighten up noticeably in September 2009. The ZEW-CS Indicator of Economic Sentiment surged by 39.4 points, reaching the 58.0 threshold. The indicator for the assessment of the current economic situation also markedly surpassed the previous month’s level, climbing by 17.1 points to reach minus 62.0 points.

Inflation expectations have increased again versus the previous month. The corresponding balance climbed in September by 16.9 points to the 26.0 level. Although 62.5 percent of the financial market experts continue to predict that the Swiss Market Index (SMI) will gain terrain, the relevant balance lost ground by 10 points month-on-month in September and now stands at the 43.7 mark.

This month’s special question deals with the stock market. 56.4 percent of the surveyed analysts expect the SMI’s volatility not to rise. On average, a final level of 6.453 points is predicted for the SMI at year-end. Regarding the portfolio allocation, experts advise a cash ratio of 17.0 percent and a share of 12.0 percent in alternative investments. Financial analysts rated portfolio risk as the most important deciding factor.

The survey process and methodology

ZEW has conducted a similar monthly survey for Germany since 1991. The aim of the Swiss survey is to develop indicators both for Switzerland's general economic climate as well as for the Swiss services sector.

Specifically, survey participants are asked to give their medium-term expectations for important international financial markets as regards the development of the economy, the inflation rate, short- and longer-term interest rates, equity prices and exchange rates. In addition, the financial experts are also asked to assess the earnings situation of companies in the following Swiss services sectors: banks, insurance, consumer/retail, telecoms and services as a whole.

The results represent the net difference between the percentage of positive and negative responses. Figures in parentheses show the changes for each indicator compared to the previous month.

For further information please contact

Dr. Gunnar Lang (ZEW), Phone: +49/621/1235-372, E-mail: lang@zew.de

Marcel Thieliant (CS), Phone: +41/44/332-9061, E-mail: marcel.thieliant@credit-suisse.com