Swiss Finance Chiefs More Optimistic SNB Will Defend Franc Limit

Swiss finance chiefs are more optimistic that the Swiss National Bank will keep the franc at or above its ceiling versus the euro over the next year than three months ago, according to a Deloitte survey.

The franc will stay at 1.20 per euro or higher over the next 12 months, according to 90 percent of 116 finance chiefs in a survey conducted between Feb. 25 and March 18. That compares with 78 percent who thought the same at the end of the fourth quarter of 2012.

“The mood amongst CFOs is good -- the first time in two years that it’s generally positive,” Michael Grampp, Deloitte’s chief economist in Switzerland, said at a press conference in Zurich today. Finance directors’ expectations for sales growth over the next 12 months have also increased, he said.

Swiss exporters are battling against a franc which strengthened in recent months after reaching a 20-month low of 1.2569 per euro in January. Clariant AG (CLN) and Lonza AG (LONN) have reduced Swiss operations as budgeting for Europe’s highest-paid workforce becomes more difficult.

A weaker franc would help Swiss companies sell more products abroad and compete with cheaper offerings from neighboring countries such as Germany.

The franc rose to as high as 1.008 per euro in August 2011, from as low as 1.6828 in 2007, before the SNB imposed a 1.20 per euro ceiling in September 2011 to help exporters and fend off deflation.

Cap Stays

Still, the SNB may have to defend the 1.20 cap for the next two years at least, Rudolf Huber, President of CFO Forum Schweiz, a group representing Swiss finance chiefs, said in an interview in Zurich. The franc will probably not weaken versus the euro as the euro-zone economy won’t grow, Huber said, adding that high costs will deter Swiss companies from building new factories at home.

At the same time Huber sees the appetite for acquisitions rising among Swiss companies over the next two years as companies are prepared to pay more for deals.

“I think the risk appetite will pick up a bit,” he said.

To contact the reporter on this story: Patrick Winters in Zurich at

To contact the editor responsible for this story: Simon Thiel at

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