Swiss National Bank Adjusts Investment Portfolio

The Swiss National Bank recently made significant changes to its investment holdings, including reducing its positions in several prominent US-traded securities. In the third quarter, the bank disclosed stock trades that involved slashing its stake in AMC Entertainment Holdings, as well as reducing investments in Apple, Nvidia, and Tesla. These moves were revealed in a form filed with the Securities and Exchange Commission.

An Insight into the Bank’s Actions

The Swiss National Bank, known for its conservative investment approach, has chosen to remain tight-lipped about its recent transactions. However, it’s worth noting that the bank’s balance-sheet total experienced a notable contraction in 2022. This marked the first decrease in 15 years, with its total shrinking from $1.2 trillion to $988 billion. In their annual report, the bank attributed this loss primarily to valuation losses on investments. Foreign currency sales also played a contributing role to the decline.

A Shift Away from AMC and Other Stocks

One of the most significant adjustments made by the Swiss National Bank was its decision to sell a substantial portion of its holdings in AMC Entertainment Holdings. By selling 828,750 shares, the bank concluded the third quarter with 301,691 shares remaining. This decision comes as no surprise given AMC’s struggling stock performance. The company witnessed an 80% drop in the first nine months of 2023 and has so far experienced an additional 14% decline in the fourth quarter. Comparatively, the S&P 500 index showed positive growth of 12% and 6.3% in the respective time periods.

AMC Faces Multiple Challenges

AMC Entertainment Holdings has encountered a series of challenges this year. The company executed a reverse stock split, consolidating its shares at a ratio of one for ten. Additionally, it converted preferred equity units into common shares in an effort to generate capital and strengthen its balance sheet. Despite these attempts, AMC continues to face hurdles. In October, AMC CEO Adam Aron revealed that he had fallen victim to a blackmail plot. These difficulties contribute to the company’s uncertain outlook.

Apple’s Woes in the Chinese Market

Apple, a prominent investment for the Swiss National Bank, also faced turbulence in 2023. CEO Tim Cook began the year by accepting a substantial 40% pay cut. The company’s ongoing concerns regarding the Chinese market were evident from its latest quarterly earnings and guidance. In an attempt to address these issues, Cook journeyed to China in October. There, he met with a key supplier and held discussions with senior government officials in what was likely a bid to strengthen Apple’s presence and resolve its concerns.

The Swiss National Bank’s recent adjustments to its investment portfolio shed light on its cautious and adaptive investment strategy. With marked reductions in AMC Entertainment Holdings, Apple, Nvidia, and Tesla, the bank appears to be positioning itself for continued success amidst a shifting economic landscape.

Apple Stock Surges in 2023

Despite concerns about China, Apple stock has experienced a significant surge in value. In the first nine months of 2023, the stock rose by an impressive 32%. Furthermore, in the fourth quarter alone, shares have increased by 11%.

Swiss bank, in an effort to consolidate its holdings, sold 6.6 million Apple shares, bringing their total to 50.6 million shares by the end of the third quarter.

Nvidia Stock’s Impressive Performance

Nvidia has also performed remarkably well in the stock market. Over the course of the first nine months in 2023, Nvidia’s stock tripled in value. In the fourth quarter, the shares have seen another boost, increasing by 10%.

The Swiss National Bank, taking similar action as with Apple stock, sold 976,200 Nvidia shares. They now hold a total of 7.9 million shares.

Nvidia’s earnings report for the third quarter far surpassed expectations, solidifying its standing as a strong player in the market. The growing interest in artificial intelligence has contributed to the continued rise of Nvidia stock.

Tesla Stock Not Experiencing the Same Rally

While Nvidia and Apple stock experience significant gains, Tesla has had a less dramatic year. In the first nine months of 2023, the EV maker’s stock has only doubled in value. Unfortunately for Tesla, stock performance seems to be declining in the fourth quarter, with a 6% decrease.

Interestingly, Tesla and Nvidia have a connection: Tesla CEO Elon Musk has praised Nvidia chips as being integral to the success of their electric vehicles. Musk has stated that they are eager to obtain more Nvidia hardware. However, Musk’s controversial tweets have raised concerns about his leadership. As with other tech companies, China’s influence remains a topic of concern for investors.

Swiss National Bank made a move to sell 1.1 million Tesla shares, bringing their total holdings down to 9.2 million shares.

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