"Mystery" Buyer Revealed: Swiss National Bank's US Stock Holdings Rose 50% In First Half, To Record $62BN

Tyler Durden's picture

In a month, quarter and year, in which many have scratched their heads trying to answer just who is buying stocks, as both retail and smart money investors have been aggressively selling...

... yesterday we got the answer.

In the second quarter, the Swiss National Bank added $7.3 billion to its US equity portfolio, and according to its just filed 13-F, is now long a record $61.8 billion in US stocks, up from $54.5 billion a month ago. In fact, rising from $41.3 billion in total US stock holdings as of December 2015, this means that the Swiss central bank increased its total US holdings by a record 50% in the first half of 2016.

That's just a small fraction of the central bank's total assets, which amounted to CHF690 billion of which CHF635 was in the form of foreign currency investments, which include bonds and stocks.

Of this CHF635 billion, the activist central bank had invested 20% in global equities, with about 60% of that being allocated to US stocks.

 

Going back to the SNB's US equity focus, here is a breakdown of the top 15 holdings, most of which posted substantial increases in the second quarter.

 

And, of course, the top holding which as regular readers know, is Apple. In fact, with its latest holdings of 15.6 million in AAPL shares, the central bank is a bigger holder than Calpers, Janus, Invesco, Oppenheimer, Franklin Resources, Morgan Stanley and hundreds more.

Shortly, we will show the just as unprecedented buying of US stocks by another state actor, Japan's $1.3 trillion General Pension Investment Fund, which also acquired billions of stocks in the past few months, but even absent that we now have the answer to the recurring question of who has been buying stocks as others were selling: central banks.

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Twee Surgeon's picture

My point is that it might indicate that Switzerland itself, the physical and actual real estate of the nation Suisse, might be thought to have a potential threat from the outside that might make offshoring some assets a wise move, just a wild hair speculation based on the recent moves they have made, based on nothing but my healthy paranoia and a little perspective.

In the gayest of all conspiracy theories, The Incoming Asteroid that only the government knows about theory, moves like this might be expected, there is also the weaponised plague theory, etc, Moving large amounts of Swiss wealth overseas because the Swiss walls might not be impermiable to a threat that might be incoming but not advertised,for the benefit of the Swiss people or at least some of them, 1% perhaps?

But no, most likely it is just all coincidental, that is why I trust large governments and banks, they always look out for us common charlies.

Zombie attack.

cwsuisse's picture

The swiss franc has been shot down by the SNB on various occasions. Otherwise the franc would be much higher and the swiss industry, which is always complaining about the franc being to expensive, would be killed.

cwsuisse's picture

Switzerland is probably the worlds largest processing center for gold bullion. That means that gold is shipped to Switzerland and reprocessed, i.e. melted and recasted applying high industrial standards. The bullion produced by Swiss companies is globally accepted by the market. What does this mean? (1) Obviously old bullion which does not meet the market standards needs to be recasted to become fully tradable. The quantities are obviously considerable (2) The process of reprocessing gold in Switzerland does not mean that gold is exported from swiss vaults. The gold may come from any place, be reprocessed in Switzerland and than transported to any place. The gold holdings of the SNB by the way are insignificant. The SNB and other central banks like the BoE sold most of their gold at rather low prices. Maybe this was done to weaken their currency.

Dark Daze's picture
Dark Daze (not verified) heddahenrik Aug 4, 2016 7:25 PM

THe Swiss NAtional Bank which can create money at will, is distorting the market. There is no economic activity to support those new currency units. That is how a currenty system should be run. Otherwise you either have to extinguish all that new money (and have someone take enormous losses) or you will eventually get hyperinflation for sure.

Whether they want that or even care, is another matter.

cwsuisse's picture

The SNB is required, in their view very unfortunately, to disclose their stock holdings. As far as I know the FED, the ECB, the BoE and the BoJ do not disclose their stock holdings. All direct and indirect stock holdings of the central banks taken together are presumably enormous and provide a strong pillar for the market. Because these holdings have not been financed with "real money" (i.e. money from profits) but with "money made from thin air" the markets must be considered entirely rigged. That is bad because rigged markets always fail over time. 

cwsuisse's picture

Your assumption that central banks strive for a strong currency is strongly contradicted by the central banks themselves which frequently mention inflation target rates and complain about the threat of deflation which in their language is nothing but insufficient inflation. Cheaper currency is good for exports and most countries (and central banks) are desperately trying to weaken their currencies. The competion among the central banks to weaken their currencies is dubbed "the race to the bottom". Japan, Switzerland and the EU have a particular history of weakening their currencies but other countries are in the game as well. Now what do we learn from this? (1) The SNB is certainly not buying Apple shares (and Euros) because it wants to strengthen its currency. The opposite might be intended. Your assumption is to an extent dangerous because investments into shares can fail provided the central banks weaken their currencies by share purchases (2) In the alternative scenario the central banks are in a conspiracy to prop-up the stock market to defend their policy. If that should be the case the stock market develompment over the last months tells a story of substitution, i.e. central banks have stepped in and investors stepped out. Again a reason to be cautious (3) Thirdly and unrelated to this particular discussion it becomes obvious that central banks can raise interest only in unison because one central bank acting alone would increase the value of its currency and kill the exports. That is a reason why the FED cannot raise rates without other central banks following. The recent rate decreases of the BoI and others make additional rate increases very difficult for the FED.

LoveTruth's picture

That's why you should not hold any stocks, except gold mining related.

Who will be bailing them out, when the market crashes?

 

paint it red call it hell's picture

'It's the swiss, they've got their dirty little fingers in everything!', said the best south africaner accent you can conger.

Dark Daze's picture
Dark Daze (not verified) Aug 4, 2016 7:22 PM

OK. So the question is, will they just continue to do this forever? If so, then the market will never go down again and it kind of changes the whole situation, doesn't it.

Of course, profits have been dropping for many quarters now and stocks have a higher P/E than ever, so what is going to happen to the value of those stocks when the companies are forced to report GAPP.

This is all so insane, I can hardly believe it.

personal109's picture

Today, Banks can borrow and unlimited amount of money and it looks like they can buy an unlimited amount of stocks.  Ya, I guess this can go on forever.  BTFATH

Nostradamus's picture

Is the SNB filing SEC schedule 13D or 13G for these large holdings, or is it not required to?

cwsuisse's picture

Your question is irrelevant because central banks can hold shares through intermediaries which file 13D or 13G.

James TraffiCan't's picture

Here's how I see it..."Any central bank currency that you hold(1 dollar bill)  is only as good as someone is willing to pay for it or accept it. It's just a matter of time before it'll take a wheel barrell of money to buy a loaf of bread.

Got PM?

Beam me up, Scotty..."I need a German Beer to remind me of History!"

MontgomeryScott's picture

WELL!

FUCK YEAH!

I went to the 'big going-out-of-business sale' at Border's Books, and found an untainted copy of the 'Director's Cut' of the movie 'DAS BOOT'. I'm trying to find a vintage 6-pack of Grolsch (the green bottles with the REAL CORK STOPPERS and the flip-up steel bindles).

JailBanksters's picture

So your telling me ...

A country with 8 Million people, and one Bank put 1/10 of their Counries GDP into

US stock holding. I dunno ...

I think it's more like Janet just gives the Swiss Bank 63 Billion Cheque but you can only

spend it on US Stocks and you have to keep there for 5 years or whatever.

 

MontgomeryScott's picture

REALLY?

(BA-HA! Baa-ha-ha-ha-ha...)

According to the financial news, TWO 'banks' just got DE-LISTED from the 'STOXX 500'.

WAIT FOR IT...

The FIRST one was DEUTCHEBANK ('smart' traders know about THIS ONE).

I'll give you 20 seconds to name the SECOND ONE.

...., ... ,...,.!, .....

.... ..., !, .. . . . .!

(Sung to the tune of 'Final Jeapordy')

What is, 'CREDIT SUISSE', Alex?

(DING DING DING...)

Fricking Swiss Army Knife (T.M.) stocks are all right, I suppose.

YO-DEL-EH-HE-WHOO!

Tell them what they've WON, JOHNNY!

Ah, yes! Our 'CONTESTANT has just won an all-expenses-paid trip to the EXCLISIVE RESORT located in the heart of BRUSSELS; Camp 'HOPEY-CHANGEY'!

(insert canned applause)

YES, Alex, the dreams of un-numbered Swiss bank accounts and stolen Nazi Gold have been FINALLY realized! The contestant's 'Westworld' fantasy life will be made a REALITY (and the so-called '15 minutes of fame' will be realized by STOXX traders the WORLD WIDE!). Our special guest YUL BRENNER will be your PERSONAL GUIDE in to this world of MYSTERY and DANGER!

 

HOLY fucking SHIT!

 

I really LIKE buxum and nubile blonde girls in short skirts, and good cheese, and watches ('fine Swiss timepieces'), and skiing, and shit like that. DON'T MISUNDERSTAND ME HERE.

The French and the Swiss, they built this 'cross-border' machine, called the Large Haldron Collider, a couple of years back. I understand that the Chinese are building one that will make THIS machine look like a 'Model-T' in comparison.

The DREAMS OF AVARICE will NOT be UNDERSOLD or UNDER-BIDDED.

The SWISS GOVERNMENTAL AGENCIES are FOOLS that are following a FOOL'S ERRAND.

THEIR POPULATION as a whole are the ones who will SUFFER, and eventually be ERADICATED in the overall 'larger picture' envisioned by those 'IN CONTROL'.

 

On the LIGHTER SIDE, Japan's plan to build a 'Frozen Ice Wall' around the FUKUSHIMA complex apparently is a FAILURE, and they are looking to a last-ditch effort to try to build a 'SARCOPHAGUS-TYPE' structure (like the one at CHERNOYBL, UKRAINE). The Pacific Ocean life forms are expected to get a reprieve, and sometime within the next 120,000 years or so, might actually be fit for human consumption again! I can't WAIT for the day when I can open a can of Tuna and make a sandwich again (without the intake of radionucleiedes).

 

AYE, captain.

As you say, 'No intelligent life here'.

(Shakes head and does facepalm in recacitrant sorrow)

One to beam up.




 

 

Long memory man's picture

Laugh? I nearly died this morning. Here on the good old BBC this morning they gave an in depth "waffle" on the BOE reduction.

The upshot of the news item (vomit) was "the place to get returns is in the stock market"

Either the "expert" was as clueless as the presenter, which would be difficult, or was a schill to get the muppets to buy stocks so that the unload could begin.

You dont think that the Swiss CB would buy equities in USA to keep the market up for Hillary do you??,