Zurich continues to grow and considers additional share buyback
Topic of the day
Zurich Insurance succeeded in increasing its premiums over the first nine months of the year. On Thursday, management also confirmed its targets for 2025. Between January and the end of September, gross premiums in general and accident insurance rose by 8% to 34.59 billion dollars, the Zurich-based group detailed in a press release. The Zurich-based group published its results for the first time under the new IFRS 17 accounting standard. Annual premium equivalents in the life insurance business rose sharply by 21% to USD 12.17 billion. Business in the United States with partner Farmers Exchanges generated gross premiums up 2% to 20.64 billion. Management has confirmed its target for the period 2023-2025 of a return on equity (ROE) of 20%, as well as an improvement in earnings per share of at least 8% a year and a payout ratio of around 75% of annual profit in the form of dividends.
The Swiss stock market ended trading on Wednesday with a slight gain. The reporting season in particular set the pace. A further rise in the SMI was prevented by the marked fall in Swiss Life shares. The Group reported a decline in its asset management business and a deterioration in its solvency ratio for the first nine months of the year. The share was at the bottom of the index with a decline of 5.9 per cent. Swiss Re shares fell by 0.1 per cent in the wake of the decline. The SMI improved by 0.2 per cent to 10,595 points. Among the 20 SMI stocks, there were 14 price gainers and six price losers. A total of 21.80 (previously: 18.34) million shares were traded. Among others, the shares of luxury goods manufacturers Richemont and Swatch were in demand, rising by 0.9 and 1.0 per cent respectively. The shares of Zurich Insurance and Logitech rose by 0.1 per cent each.
After hours of directionless trading, the European stock markets started to rise on Wednesday afternoon. The DAX rose by 0.5 per cent to 15,230 points, while the Euro-Stoxx-50 gained 0.6 per cent to 4,178 points. The European banking sector closed little changed, with shares in the Dutch ABN plummeting by a good 9 per cent. ABN Amro performed disappointingly for the analysts at RBC, with net interest income falling short of anticipations. By contrast, the sub-index of retailers in Europe rose by 1 per cent, driven by the 8.4 per cent increase in Marks & Spencer's share price. The British clothing and food retailer reported higher sales and profits for the first half of the year. DHL (Deutsche Post) closed up 2.9 per cent. The business figures of Siemens Healthineers (+1.3 per cent) were well received. Commerzbank shares rose by 0.7 per cent. Market commentators reported that the quarterly figures were mixed. Net interest income had developed slightly better than expected and net commission income as anticipated. Meanwhile, Continental's lowered sales forecast was offset by the margin outlook. The share price rose by 4.1 per cent. Bayer lost 0.8 per cent after its quarterly figures were mostly slightly below anticipations. Eon dropped 0.8 per cent and Enel closed 0.5 per cent lower. Vestas made a leap of almost 10 per cent upwards. The Danish wind power company's net profit was markedly higher than forecast. In the slipstream, Nordex climbed by almost 3 per cent. The headwind is currently blowing in the faces of beer brewers such as Royal Unibrew, and the Danes from Faxe cannot escape it. The share price plunged by 12.5 per cent.
Major stock indexes ended mostly higher Wednesday, building on a long run of gains. The S&P 500 added 0.1%, notching an eighth-straight session in the green. The Nasdaq Composite also added 0.1%, now higher on nine consecutive days, its longest winning streak in two years. The Dow Jones Industrial Average slipped 0.1%, or 40 points. Gaming platform Roblox soared 12%, its best day since February. The company grew revenue and slowed its pace of spending. Biotech shares were among Wednesday’s worst performers. Biogen shares fell 5.7%, with investors awaiting progress on the rollout of its Alzheimer’s drug Leqembi. Gilead Sciences lost 3.4%, despite beating analyst expectations late Tuesday, as a one-time tax benefit aided its quarterly performance. Moderna dropped 3.1%. Media and entertainment stocks moved in both directions. Nintendo’s U.S.-listed shares jumped 3.4% on Wednesday after the Japanese videogame maker said it planned to follow the blockbuster “Super Mario Bros.” movie with a film based on its “Legend of Zelda” franchise and upgraded its full-year financial forecasts. Meanwhile, Warner Bros. Discovery fell 19%, suffering its worst one-day performance in over a year. The company said its streaming business lost subscribers and an advertising downturn weighed on its cable networks. Shares of both recently-split Kellogg’s businesses rose after reporting better-than-expected earnings on Wednesday. WK Kellogg, which assumed the North American cereals businesses, advanced 2.3%. Kellanova, which owns the snack and international cereal lines, gained 2.1%. Robinhood, one of the faces of the meme-stock boom, slumped 14% after reporting weaker-than-expected revenue. The brokerage lost over half of its crypto-trading revenues and active users fell significantly, leading shares to their largest one-day percentage drop in a year. Tech giant Microsoft added 0.7%, notching a fresh record high of $363.20.
The monetary policy debate continued to dominate the Asian markets on Thursday. Investors on the Chinese stock exchanges are torn between two sides: on the one hand, price data once again reveals the country's economic weakness, while on the other, hopes for economic stimuli are rising. The HSI in Hong Kong lost 0.3 per cent, while the Shanghai Composite stagnated. The Japanese Nikkei-225 leads the field with a gain of 1.6 per cent to 32,669 points - also supported by the weakening yen. The Kospi in South Korea rises by 0.5 per cent - thanks to tailwinds from shares of the electronics and internet sectors.
Long-dated U.S. government debt yields finished at their lowest levels in more than a month on Wednesday after a 10-year auction went as expected and reaffirmed buying interest in government debt. The 10-year Treasury note yield fell by 5 basis points to 4.52%. The 2-year Treasury note yield, on the other hand, recovered 2 basis points to 4.949%.
Price target Barry Callebaut: Morgan Stanley downgrades to CHF 1620 (1680) -Equal Weight
Target price Geberit: Barclays raises to CHF 400 (390) - Underweight
Target price Kardex: UBS lowers to CHF 242 (251) - Buy
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