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Market Analysis

In the first quarter, Swiss National Bank reports record profits
Amos Simanungkalit · 6K Views

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In the first quarter, the Swiss National Bank reported a remarkable profit of 58.8 billion Swiss francs ($64.34 billion), driven by a depreciating franc and flourishing equity markets, marking its highest-ever quarterly profit. 


This figure outstripped the 26.9 billion francs profit recorded a year earlier and surpassed projections by UBS economists, who had anticipated a profit ranging between 40 to 50 billion Swiss francs. Notably, this result eclipsed the SNB's prior record profit of 38.9 billion francs achieved in the second quarter of 2020.


During the quarter, the SNB capitalized on a profit of 52.4 billion from its foreign currency holdings, buoyed by the upswing in global stock markets at the year's outset, with the MSCI World Price Index climbing by 10%. Among its substantial foreign currency investments, the central bank retains approximately 170 billion francs in stocks, including interests in major companies like Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Starbucks (NASDAQ:SBUX).

 

The devaluation of the franc, which saw a decline of approximately 5% against the euro and 7.5% against the dollar in the first quarter, further amplified the value of the SNB's foreign assets denominated in francs. Additionally, the SNB realized a valuation gain of 8.9 billion francs from its holdings in gold, as the price of the precious metal surged by 15% amid apprehensions surrounding tensions in the Middle East.

 

 


Paraphrasing text from "Investing" all rights reserved by the original author.

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