The central bank of Switzerland recently made major changes in its investments in technology and automakers.
The Swiss National Bank nearly doubled investments in electric-vehicle makers
Rivian Automotive
(ticker: RIVN) and
Lucid Group
(LCID) in the second quarter, and one of those bets has already paid off. The bank also sold
Apple
(AAPL) and
General Motors
stock (GM) in that quarter, and disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
The bank declined to comment on its investment changes. By year-end 2022, its balance-sheet total shrank for the first time in 15 years, to $988 billion from $1.2 trillion. The loss was “principally due to valuation losses on investments, with foreign currency sales also a contributing factor,” the bank said in its annual report.
The Swiss National Bank bought 1.1 million more Rivian shares in the second quarter to lift its investment to 2.3 million shares. Rivian stock crumbled 82% in 2022, and dropped 10% in the first half of this year, far underperforming the
S&P 500,
which slipped 19% in 2022, and rose 16% in 2023’s first half. The bank’s purchase of Rivian stock looks like a prescient transaction because so far in the third quarter, the stock has surged 39%, trouncing the index’s flat performance.
Rivian stock soared in early July after the company reported strong second-quarter deliveries. Analysts have been weighing in on Rivian, offering upbeat assessments as of late.
Like Rivian, Lucid stock was pummeled in 2022, and plunged 82%. Lucid shares managed to gain 1% in the first half of this year, and so far in the third quarter they have dropped 15%.
A disappointing second-quarter report in early August sent Lucid stock lower. The company has been cutting prices of its EVs, and investors are taking that as a sign that demand is flagging.
The bank bought 1.5 million more Lucid shares to end the second quarter with 3.2 million shares.
The Swiss National Bank sold 6 million Apple shares in the quarter to trim its investment to 57 million shares of the iPhone maker.
Apple has had to contend with a September double-challenge from China. The country has banned government officials from using iPhones at work, and Shenzhen-based Huawei released a high-speed, high-price phone that could eat into Apple’s market share. The company is set to unveil its iPhone 15 this Tuesday, with a higher price point than the previous model.
The latest newsflow has weighed on Apple shares, which sport a 9.3% slump so far in the third quarter. But shares soared 51% in the first half of 2023, more than erasing a 27% slip in 2022.
GM stock has faced challenging headlines as of late, as well, and sits 15% in the red so far in the third quarter. Shares rose 15% in the first half of 2023, after a 43% drop in 2022.
GM and the other big automakers are facing a looming strike by the United Auto Workers. Even if a strike doesn’t occur, labor costs for the industry are expected to go up. If a strike should happen, based on recent history, it should be resolved fairly quickly with little net damage to GM stock.
The bank sold 600,000 GM shares to end the second quarter with 5 million shares.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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