The Swiss stock market is expected to attract investors as the economy recovers and inflation increases. Despite a steep drop in January and February, trading volumes are predicted to rise in the second half of 2021.
The volume of transactions dropped by 40% year-on-year between January and June to 33.7 million, with a turnover of CHF 694.54 billion (-32%). In June, SIX reported growth after three months of decline.
Brokers active on the Zurich market are optimistic, “Since the global economy seems to be recovering faster and stronger than expected,” said André Buck, head of sales at SIX, the Swiss Stock Exchange, quoted in a statement Wednesday.
Inflation, according to the respondents, is likely to boost volumes in the second half of the year. As recently as a few weeks ago, inflation had raised concerns on the financial markets, as participants feared that inflation could spell the end of accommodating monetary policies and the flood of cheap money that central banks have been pumping into the stock market for months.
At 48%, inflation was cited as the leading factor affecting volumes, compared to 46% for economic recovery. In comparison, the German parliamentary elections (4%), trade conflicts between Switzerland and the European Union (1%) and the climate crisis (1%) pale in comparison.
If the Swiss stock exchange saw a sharp spike in trading, the operator SIX asserts that it can absorb the shock. Buck says the Swiss Exchange will be ready to handle the additional volumes.
Companies around the Swiss Exchange are also confident. According to the statement, 40% of those surveyed said their company will grow over the next three years, compared with 18% at the end of 2019. Traders who expect to hire new staff are more numerous (13%) than those who expect to reduce their payroll (10%).
During the second quarter, the survey was conducted among 1,900 brokers registered in Europe.