SNB's Elusive German Investor May Be Clue to Its Big Share Gain

(Bloomberg) -- The Swiss National Bank’s biggest private shareholder sold 10 percent of his stake in 2017, capitalizing on the thinly traded stock’s mystifying rally.

Theo Siegert, a German businessman and professor, held 6,070 shares -- or 6.07 percent of the SNB -- as of Dec. 31, down from 6,720 a year earlier, the central bank said in its annual report published Thursday. Siegert has been a shareholder since at least 2008 and had steadily increased his stake every year through 2016.

SNB's Elusive German Investor May Be Clue to Its Big Share Gain

Dividends and voting rights are limited for private SNB shareholders, and they get no say on monetary policy or personnel decisions. Because of these restrictions, the development of the central bank’s share price -- it more than doubled last year -- left central bank watchers bewildered.

Siegert’s divestment may help explain the share rally, which sent the stock to a peak of 4,724 francs in 2017, with Raiffeisen economist Alexander Koch saying that stake reduction “definitely” played a role.

An increase in supply would typically lower the price of an asset. But with the European Central Bank’s asset-purchase program reducing liquidity on super-safe bonds and pushing their yields below zero, the Swiss central bank’s shares may be an interesting alternative for some investors. SNB stock is considered a proxy for bonds and Siegert’s selling may have created liquidity and room for price movements.

Trading picked up last year, with 151 units changing hands per day on average, according to data compiled by Bloomberg. That’s up from 106 daily in 2016, 64 in 2015 and just 32 in 2008. The SNB share price is on track for another stellar year with a gain of 51% since January.

SNB's Elusive German Investor May Be Clue to Its Big Share Gain

The biggest shareholders in the central bank are Switzerland’s cantons and cantonal banks. The cantons of Bern, Zurich, Vaud and St. Gallen all kept their holdings unchanged, the report showed.

When called by telephone on Thursday, Siegert’s company de Haen-Carstanjen & Soehne in Dusseldorf, Germany, said he was unavailable. There was no immediate response to an email seeking comment.

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