Julius Bär has increased its profitability in the first six months of 2023. Boosted by rising interest rates, the Zurich-based asset manager saw its IFRS net profit attributable to shareholders jump 18% year-on-year to CHF 532 million. At CHF 7.1 billion, net new money exceeded expectations. Net profit adjusted for the effects of acquisitions and divestments rose by 14% to CHF 541 million, Julius Bär reported on Monday. Revenues grew by 8.8% to CHF 2.03 billion, thanks in particular to higher interest rates, which more than offset the decline in commissions and fees. The adjusted cost/income ratio amounted to 65%, compared with 67% a year earlier. At the end of June, the Zurich-based bank managed assets of CHF 441 billion, up 4%, driven in particular by net new money of CHF 7.1 billion. The performance was more or less in line with analysts' expectations, with only adjusted net profit falling short of forecasts.

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On Friday, the SMI increased by 0.1 per cent to 11,207 points. Among the 20 SMI stocks, there were 15 price gainers and five price losers. 15.77 (previously: 18.4) million shares were traded. The SMI was slightly supported by the heavyweights Nestle (+0.6%), Novartis (+0.4%) and Roche (+0.3%). Lonza shares slid sharply by 11.1 per cent. The pharmaceutical contract manufacturer posted a drop in profits in the first half of the year despite an increase in sales and therefore lowered its earnings targets. Givaudan (-2.5%) saw follow-on selling after the previous day's disappointing financial results. ABB (+0.9%), on the other hand, again benefited from the strong figures the group had presented on Thursday. In the second tier, the results published by Schindler (+6.6%) were well received. Efficiency measures paid off, according to the lift manufacturer. Temenos' (+1%) figures were not convincing in all areas. Profit was markedly above market expectations, while sales were just below.

The European stock markets closed broadly in positive territory on Friday, against a backdrop of numerous corporate earnings releases. The Stoxx Europe 600 index gained 0.3% to 465.4 points. In Paris, the CAC 40 and SBF 120 advanced by 0.7% and 0.6% respectively. The DAX 40 in Frankfurt gave up 0.2%, while the FTSE 100 in London added 0.2%. Over the week as a whole, the Stoxx Europe 600 climbed 1%. Aircraft manufacturer Dassault Aviation (-8.5%) was the biggest decliner among the SBF 120 after publishing lower-than-expected results for the first half of the year. Thales (-4.8%) reported a sharp rise in first-half results, offset by disappointing full-year forecasts. Video games publisher Ubisoft (+5.2%) posted higher-than-expected net bookings (equivalent to sales) for the first quarter of its financial year ending March 2024. Pharmaceutical supplier Sartorius Stedim Biotech (+14.5%) confirmed its targets for 2023, after a sharp fall in its first-half results due to a marked weakening in demand following the end of the Covid-19 pandemic. Pharmaceutical company Ipsen (-1.3%) announced that the Committee for Orphan Medicinal Products (COMP), a scientific committee of the European Medicines Agency (EMEA), had issued a negative opinion on the maintenance of orphan drug status for Bylvay (odevixibat) in the treatment of cholestatic pruritus for patients with Alagille syndrome (AGS). German software company SAP (-4.1% in Frankfurt) displayed increased caution regarding revenues from its cloud computing activities, which are expected to grow by 23% to 24% this year to between €14 billion and €14.2 billion at constant exchange rates, compared with the upper limit previously set at €14.4 billion.

The Dow Jones Industrial Average eked out its tenth-straight daily gain Friday, overcoming an earnings-day selloff in American Express shares with gains from a range of blue-chips, including Intel, Procter & Gamble, Nike and Chevron. On Friday, the Dow added less than 0.1%, or about 3 points. The S&P 500 also climbed less than 0.1%, while the Nasdaq Composite, which is loaded with technology stocks, declined 0.2%. The Dow gained 2.1% during the week. Drugmaker Zoetis, equipment designer Danaher and online bazaar Etsy were among the S&P 500’s top gainers, rising 6.9%, 4.7% and 3.9%, respectively. Advertising company Interpublic Group was the S&P 500’s worst performer, dropping 13% after falling short of quarterly revenue expectations and slashing its growth forecast because of reduced spending among its tech clients. Investors also found reasons to sell in the quarterly earnings of American Express, down 3.9%, and oil-field-services giant Schlumberger, which shed 2.2%. Banking stocks also took a hit Friday, when several lenders, including Regions Financial and Comerica, reported earnings. Despite Friday share-price declines—Regions fell 3.1%, Comerica lost 4.1%—the KBW Nasdaq Bank Index gained 6.6% during the week, its best in more than a year. Earnings season picks up steam next week with companies including Microsoft and Facebook-owner Meta due to report. Investors will also be on the lookout for clues as to the Federal Reserve’s plans for interest rates later this year. The central bank is expected to raise interest rates by a quarter percentage point to a 22-year high when it meets next week.

Asian stocks were mixed at the start of the new week. In Hong Kong, the Hang Seng Index loses 1.4 per cent. Country Garden falls by 5.8 per cent and Longfor Group by 10 per cent. Meanwhile, on the Shanghai Stock Exchange, the Composite Index is up 0.1 per cent. On the Tokyo stock market, the Nikkei 225 index gains 1.3 per cent. Hope that the Japanese central bank will reaffirm its loose monetary policy at its interest rate meeting this week is boosting the market. In addition, the financial results of the car manufacturer Mitsubishi Motors (+5.6%) are well received. Shares of other industry leaders are also in demand: Subaru improves by 2.5 per cent, Honda by 1.7 per cent and Toyota by 1.3 per cent. In Seoul, South Korea, the Kospi turned positive after initial losses and is actually up 0.7 per cent. Among individual stocks, Posco climbed by almost 10 per cent after the steel group presented strong financial results.

Activity on the Swiss bond exchange was subdued at the end of the week. Turnover was low, commented a trader. The upcoming weekend, the holiday season as well as the interest rate decisions of the US Federal Reserve (Fed) and the European Central Bank (ECB) next week dampened business. The two-year Swiss Confederation yield oscillated around 1.07% and the 10-year around 0.94%. Meanwhile, the Swiss Bond Index SBI edged up 3bp to 127.40%. The ten-year spot rate climbed to 0.920 from 0.894% the previous day. As recently as Wednesday, the spot rate had fallen to its lowest level since the beginning of June at 0.842%.

UBS upgrades ABB to CHF 40 (37) - Buy

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UBS downgrades Bossard to CHF 158 (165) - Sell

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