The Swiss Market Index (SMI) has bounced back in the past few weeks as investors predict that interest rates will start retreating in 2024. The blue-chip index, which tracks the biggest Swiss companies, was trading at CHF 10,760, which was about 5% above the lowest point in November. It remains about 7.3% below the highest point this year.
Partners Group is thriving
Most SMI index constituents have done well this year. UBS shares have risen by over 34% this year, helped by its acquisition of Credit Suisse, then the second-biggest bank in the country.
Other top performers in the SMI index are Holcim, Logitech, ABB, and Swiss Re, which have jumped by over 20% this year. On the other hand, the top laggards are Lonza, Roche Holdings, Richemont, and Nestle.
Partners Group (SWX: PGHN), a large private equity company, is the best-performing constituent in the Swiss Market Index. The stock has jumped by over 38% even as challenges in the industry has remained. Higher interest rates have reduced the number of transactions and devalued most companies.
Partners Group is not the only PE firm whose stock is doing well. As I wrote recently, shares of PE firms like Apollo Global Management, KKR, and Blackstone have risen by over 40% this year. Expectations are that central banks will start cutting rates in 2024 since inflation is falling.