June 2013

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Mortgage Rates in Switzerland Accelerating Up

According to the chart below, published by comparis.ch today, mortgage rates are spiking upwards. In the last 6 months the rates for 10-year mortgages in Switzerland have moved up 0,5%. The pace has been accelerating in the past 2 months which saw 0,3% or 60% of the 6 month move. If the pace continues, rates could be at 4% by end 2014, beginning 2015 (also check 2nd chart). Anecdotal evidence…


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Graubündner Kantonalbank (GRKP), UBS, Valiant Bank (VATN) and the SMI over 15 years

Chart of the weekend: Graubündner Kantonalbank (blue) vs UBS (red) and SMI (green) over a 15 year time period. You lost nothing with the SMI, lost more than half your money with UBS. However with Graubündner KB shares you’d have nearly trebled your money. Also check this chart though: Valiant was going extremely strongly during the whole financial crisis, then fell of a cliff and never recovered. A 12 year…


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Julius Baer vs UBS and Basler KB – One Month Comparison

I’m a bit puzzled at how differently banks are performing that are in the focus of the US DOJ. According to Morgan Stanley Julius Baer (BAER) has a low single digit billion amount from US clients (1-2bn? – however in the article only between 0.1 and 1.3bn are mentioned). Basler KB (BSKP) has 600m. The share price of BSKP has tanked by close to 30% (-900m market cap change) while…


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Market Overreaction To Basler KB (BSKP)?

Today Basler KB is worth roughly CHF 2.2bn. That’s down from over CHF 3bn just four weeks ago. That’s a >30% haircut. Now the interesting thing: According to the CEO of the bank, Basler KB only has assets totalling 600m from US clients (1). Even if the worst case fine was to get imposed by the US DOJ, that would mean that the share price has overreacted by over 500m…


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Major Swiss Cantonal Banks by Market Cap / Berner Kantonalbank (BEKN) vs UBS (UBSN) and SPI

The chart above shows a selection of swiss cantonal banks by market cap. Note that BSKP (Basler KB) owns a majority stake in BC (Bank Coop). Data as of June 20th 2013. BCV (BC Vaud) and Berner Kantonalbank (BEKN) are #1 and #3 respectively, #4 is Baselland KB, #5 St.Galler KB, #6 Zuger KB, #7 BC Genève. The 5-year chart below shows that Berner Kantonalbank was outperforming the broad based SPI…


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Basler KB (BSKP), Bank Coop (BC), UBS (UBSN), Baselland KB (BLKB)

Three charts below: First one is Bank Coop (Ticker: BC) vs Basler KB PS (Ticker: BSKP) shares. Bank Coop is majority owned by Basler KB. Both have lost roughly 25% in the past month even though the Chairman of the Board at Bank Coop had said in early May that Bank Coop was only active domestically. The second charts shows that while the shares of UBS have also lost, they…


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SRI & Thoughts regarding Share Performance of St.Galler KB and Bank Coop vs UBS

This chart shows that the shares of St.Galler Kantonalbank have underperformed UBS (which had solved its issues with the DoJ in 2009 by paying USD 780m) substantially in the last 3-4 weeks. The reason for this of course could be the possibility of a situation like that at Wegelin developing and/or a large fine courtesy of the US DoJ arriving on the doormat of St.Galler KB. The uncertainity and high…


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Capital Gain Risk – Impact of Interest Rate Change on Bond Price

Today I used the Annuity Present Value Factor to calculate the impact a 1% change in interest rate has on two seperate 2-year coupon bonds. Assumption: Semi-annual payment of coupon. Once with 10% annual coupon, once with 2% annual coupon. The inspiration and formula came from this website: http://webpage.pace.edu/pviswanath/notes/investments/fixportf.html


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Calculating Compound Interest using TI BA II Plus Calculator

An amount of 1500.00 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Find the balance after 6 years. Using the TI BA II Plus calculator: Step by Step 1. Calculate number of periods that will be compounded: 6 * 4 = 24 (6 years times 4 quarters) 2. Calculate quarterly interest rate: 4.3 / 4 = 1.075 (note: make sure not to enter interest rate…


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CIIA: Security Market Line – Exam 2009 MCQ 2 (Multiple Choice Question) – Solution with Graph

Today I was solving the “Modern Porfolio Theory” exam question “MCQ 2” of the March 2009 CIIA Exam but had trouble visualising it, the graph below added value for me to understand the Security Market Line (SML). The question was roughly: If you have a non-dividend paying stock, with a Beta value of 0.9 with respect to a market with a 15% expected return, currently quoted at EUR 48 and…