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The economic recovery from the crisis has recently lost momentum. The stock exchange business, on the other hand, boomed undeterred in 2021.
The stock exchanges in large parts of the world have risen sharply in the past twelve months. There were two main drivers behind this: The global economy recovered from the first waves of pandemics. And the loose monetary policy of the central banks provided the financial markets with an abundance of money.
Matthias Geissbühler, Chief Investment Officer of the Raiffeisen Group, says: “It was a very strong year on the stock market, if you look at it historically.” Since the turn of the millennium, the Swiss Performance Index SPI has earned an average of 5.5 percent per year. This year, however, it is over 20 percent.
Switzerland is almost ahead
The Swiss stock market also developed very well compared to other countries. “Only the US stock market performed even better this year,” said Geissbühler. “The Swiss stock exchange has thus performed better than the European stock markets, and also significantly better than the stock exchanges in the emerging countries.”
Only the US stock market performed even better this year.
This is not least due to the stock market heavyweights Nestlé and Roche: Both of them excelled with good business figures in 2021, and the shares rose accordingly.
In the Far East, on the other hand, the stock exchange business was resinous. China and Hong Kong even posted losses in 2021, says Geissbühler. “The regulation in China played a role vis-à-vis the tech companies, but certainly also the weakening of the real estate market.” The latter is related to the Chinese real estate giant Evergrande, which has got into acute financial difficulties.
Lost grip
In general, there was a lot going on in the financial markets in 2021. Geissbühler said of the company takeovers: “2021 looks like a record year.” One reckons with a transaction volume of almost 5 trillion US dollars. It looks similar with IPOs. “This year around 2,400 companies went public and raised almost 500 billion US dollars in capital.” According to Geissbühler, that would also be a record.
2021 looks like a record year.
However, it is noticeable that the stock exchanges have detached themselves from the real economy. The Raiffeisen Investment Director observes: “The global economy is now roughly back at the level it was at the end of 2019, perhaps slightly above it, while the stock markets are in some cases significantly higher than they were before the pandemic.”
The markets have decoupled themselves from the so-called fundamental data, i.e. from the course of the real economy. Or to put it another way: The stock exchanges have lost their grip a bit. This is simply because many investors lack alternatives to stocks.