Swiss National Bank hikes exposure to Indian companies

IT giant Infosys and auto major Tata Motors have joined an elite league of global behemoths like Apple, Microsoft and ExxonMobil, in which Switzerland's central bank SNB has hiked its exposure.

Swiss National Bank, which is among the largest central bank investors in equities globally, has also retained its investments in four other Indian companies -- ICICI Bank, Dr Reddy's Labs, Vedanta Limited and Wipro.

Ironically, SNB's enhanced exposure to the Indian companies during the last quarter, ended June 30, coincided with a loss of about 10 per cent in its nearly USD 60-million portfolio of Indian companies.

All these investments were made during the first quarter of 2015 through their American Depository Receipts, listed on the US exchanges NYSE and Nasdaq, while SNB acquired more equity in case of Infosys and Tata Motors in second quarter.

Among American companies, SNB raised its stake in giants like Apple Inc, ExxonMobil and Microsoft, which also happen to be its three biggest investments in the US.

As per the latest regulatory filing of SNB with the Securities and Exchange Commission (SEC), it held shares in more than 2,500 US-listed securities, valued at close to USD 38.6 billion at the end of second quarter of 2015. This marked an increase of about USD 1 billion from the levels seen at the end of the first quarter.

In comparison, the total value of investments in six Indian companies fell by nearly USD 6 million to USD 54.6 million.

As per SNB's latest annual report, its equity portfolios in the foreign currency investments comprised of shares from mid-cap and large-cap companies (excluding banks) in advanced economies and, to a lesser extent, shares of small-cap companies.

The Swiss central banking authority further said that it has "a globally well-diversified equity portfolio of over 5,800 individual stocks (around 1,500 mid-cap and large-cap companies and roughly 4,300 small caps)".

"In the long term, equity holdings contribute to both a higher potential return and a more balanced risk profile of the assets. With the high level of equity holdings, additional measures were taken to ensure adherence to the stock exchange rules and regulatory requirements in the different countries," SNB said.

It also said that the Bank has "decided to exclude companies which produce internationally banned weapons, seriously violate fundamental human rights, or systematically cause severe environmental damage"