All Pooped Out?
The Swiss Insider 19.04.2020 #insidersdoitsmarter
Dear Insider,
Some may dare to hope…
After more than a month of lockdown, calls are growing for a coordinated plan to release Switzerland from the grips of coronavirus rules that have already wrecked havoc across the land.
There are indications that such hopes may not be only for fools… With “only” 400 new cases of the virus over the last week and just over 1 300 deaths, the big bad Covid-19 may finally be running out of steam.
Now - the question remains…is the Swiss economy all pooped out too?
The short answer is…almost.
But at least there are tentative dates for reopening of some small businesses (27 April) and schools (11 May).
The finish line is in sight…or so it seems.
What comes after…no one yet knows.
😳 The Shocker - $1,18 billion
With recent market movements (down) and explosive interest in e-commerce, it comes as no surprise (to some) that Amazon’s stock has hit the roof. What does blow the mind, is that the American online retail platform is now worth more than the top 20 Swiss-listed companies - in other words, more than the 20 firms listed in the SMI…yes, that includes Nestle, Roche and the like…
Tell others - now.
Share this issue of The Swiss Insider with the world.
🛫 Profile in Pain - Zürich Airport
Many businesses in Switzerland are feeling the pain of the current situation. Travel has been especially hard hit and that means a mighty blow for one of Europe’s top-rated airports - Flughafen Zürich.
CEO Stephan Widrig recently revealed in an interview that the regional hub is bleeding cash to the tune of double digit millions per month, due to high, unflexible fixed costs, while its tenants - businesses and airlines fade away under the lockdown rules imposed because of corona.
Surprisingly enough, Widrig indicated that the Airport itself would not (as of now) seek a government bailout, preferring that the money go first to airlines and other businesses who can then pay their bills.
This comes despite the horrific numbers that keep rolling in:
50% year-to-year drop in flights
60% drop in passenger numbers in March
5% drop in passengers in the first two weeks of April
Whether the pride of Swiss travel can hold up until the Bundesrat’s slow unlocking programme takes effect remains to be seen…
🔍 The Scoop
Inside takes that don’t make the front pages of daily news…
⚠️ Dividend war
To dividend or not to dividend - the question makes for embarassing shadow confrontations between Swiss banks and regulators. FINMA has publicly put the screws on top banks to withhold their 2019 divident payouts to shareholders, but cantonal banks are thumbing their noses. With less exposure to global storms, they can probably afford to.
The bigger banks, including UBS and Credit Suisse are bending - but not breaking, agreeing to stagger payments over the course of 2020. Meanwhile, Julius Bär Chairman Romeo Lacher plays the passive-agressive game with FINMA chief Mark Branson, openly bowing to pressure, but taking the spat out into the open to make PR hay out of his bank’s (supposedly) strong capital positions.
⭐️The goal is clear: to build up browning points after FINMA made the bank look bad with corruption charges over money-laundering in Venezuela and elsewhere.
⭐️ ⭐️ Meanwhile, Switzerland’s premiere newspaper, Neue Zürcher Zietung, pushed ahead with its 8 million CHF dividend payout to shareholders - while at the same time running a front page article decrying the possibility of moving towards socialism in the current crisis…
💬 Cryptic communication
What could be more secure for high-stakes corporate operations than a Swiss-made encrypted messaging app? Just ask the big boys at Credit Suisse…
In the course of (alleged) internal spying campaigns, the top management of the Swiss bank have apparently resorted to Threema, the ultra-secure messaing application made en Suisse. After it was suspected that Tidjane Thiam and his henchmen used it, Chairman Urs Rohner is also alleged to have found it useful.
Swiss-made as a brand may profit at least in the short term, although crypto technology isn’t always as secure as one might suppose, as became apparent when journalists revealed that the CIA was behind Swiss secure communications company Crypto AG.
⭐️ The cat-and-mouse game between investigators from FINMA and bank big shots will not stop - encrypted comms or no. Credit Suisse just lost its court appeal against the appointment of Thomas Werlen as chief investigator. Running score: FINMA 1 - CS 0.
The Briefing
In which we boil down the stories of the last seven days - just enough to make them digestible…
⌚️ Bye-bye Basel
It was hailed around the world as the place to be - a luxurious tribute to time, where the top watch companies laid out lavish spreads to show off their latest timepieces.
Now Basel World may be no more. Top producers Rolex, Patek Philippe, Chanel, Chopard and Tudor have all announced that they will end their participation in the yearly exhibition due to the current uncertainty and market conditions. At the same time, they consider the possibility of organising their own show in Geneva, tenetively set to take place in April 2021.
Time for Swiss watchmakers to take things in their own “hands”…?
🚢 Journey to nowhere
Tourists are not happy.
With travel at a halt, so are tourist bureaus and hardly any customer group can be more upset than those who paid money for flights and hotel accommodations only to find that after their plans are cancelled their travel agent is Missing-in-Action. The result? A total breakdown in trust…
Professor of Tourism Christian Lässer paints a dark picture for the rest of the year - predicting that the industry will not fully recover until at least 2020.
The Numbers Game
All the numbers that matter in these troubled times…
📉 39%
A recent study by economisuisse, conducted with 281 persons around the country, showed a further drop in sales across the board for Swiss businesses - reaching nearly 40% compared to 25% at the end of March.
🎫 200 CHF
The socialist party of Switzerland, long an advocate for measures to support small businesses and lesser-privileged individuals, has jumped out in the current debate on economy with proposals that would include 100% salary support for those placed on furlough who make less than the national average wage, plus a coupon of 200 CHF to all residents in order to support the rebirth of local businesses, especially restaurants and cafes.
💰 10%
In the same vein, SP has also proposed an additional 10% federal tax on salaries of over 300 000 CHF as well as special tariffs on inheritances of over 10 million CHF. The party envisions using the funds raised to develop an investment fund to support economic recovery.