ZURICH (Reuters) – The Swiss National Bank sold foreign currency worth 132.9 billion Swiss francs ($149.51 billion) in 2023, the central bank said on Tuesday, showing its increased emphasis on supporting the Swiss franc as a shield against imported inflation.

The figure was a massive increase from 22.3 billion francs in foreign currencies sold by the SNB in 2022, when the bank started selling off some of its huge foreign currency holdings.

The SNB’s strategy has paid off, with Swiss inflation within its 0-2% target range for last nine months.

“The SNB’s foreign currency sales contributed to the Swiss franc initially appreciating roughly in line with inflation differentials against other countries,” the SNB said on Tuesday.

“In doing so, they prevented a weakening of the Swiss franc in real terms and thus helped in tightening monetary conditions,” it added. “Towards the end of the year, the inflation rate fell significantly.”

The SNB said it would no longer focus on foreign currency sales after achieving its goal. The central bank is due to announce its next monetary policy decisions on Thursday.

($1 = 0.8889 Swiss francs)

FMCG companies witnessed a sharp drop in revenue growth during the quarter ended December 2023 while their gross margins expanded on the back of falling input costs.
The Q3 revenue growth of fast-moving consumer goods (FMCG) companies was just 2.1%, decelerating sharply from around 6% in H1 and around 13% in FY23. The management commentaries, though, for most FMCG companies were optimistic about a better revenue trajectory aided by rural demand recovery.

Brokerage firm Anand Rathi estimates a 13% earnings CAGR over FY24-26 for its FMCG coverage universe, aided by gross-margin gains and recovering demand. It prefers reasonably valued stocks with growth assurance.
The brokerage firm has ‘Buy’ ratings on Hindustan Unilever, Godrej Consumer Products among large-caps and Zydus Wellness and Emami among midcap FMCG stocks. United Breweries is its sole preferred pick in consumer discretionary and has upgraded the stock to a ‘Buy’.

Here are the top FMCG stocks to buy:

Hindustan Unilever | Buy | TP: ₹3,100
With a subdued FY24 (favourable base) and early signs of demand revival in rural markets and in the non-food category, Hindustan Unilever should benefit in FY25. However, gross margin gains would be limited to 60 bps in FY25 on favourable input prices. Volume recovery and modest margin expansion should help to steady earnings growth of 13% in FY25, though intense competition (especially from small players) remains a concern, Anand Rathi said.
The valuation at 48x on FY25e versus the 10-year average of 51x is attractive, it added. The brokerage has a ‘Buy’ rating on the stock with a target price of ₹3,100 per share.

Godrej Consumer Products | Buy | TP: ₹1,350
Godrej Consumer Products saw consistently better Q3 volume growth in domestic markets. This, and favourable input costs aided its strong gross-margin gains, a part of which was invested in higher brand spends.
The brokerage expects the company’s core categories’ market share to rise, aided by innovations. It believes the valuation has risen recently but is likely to stay high due to better earnings assurance under Sitapathy’s leadership.

It has a ‘Buy’ call on Godrej Consumer Products with a target of ₹1,350 per share.

Emami | Buy | TP: ₹616
Emami had a mixed Q3 with below-expectation volume recovery, mainly due to adverse weather denting its seasonal portfolio. Despite this, gross margin gains were healthy, aided by the fall in key input prices, though offset by higher brand spends.
“Even though new companies are entering its core cooling-oil category, management said it hasn’t seen any material share loss. The valuation is attractive at just 24x on a 1-year forward basis, adding lustre to the company’s steady earnings outlook,” Anand Rathi said.

It has a ‘Buy’ rating on the stock with a TP of ₹616 per share.
United Breweries | Buy |TP: ₹2,150
United Breweries reported a steady 8%
volume growth. Also, the gross margin and
EBITDA margin rose, bolstered by the drop in
prices of barley. The brokerage believes
concerns regarding volume decline, market-
share loss and weaker margins are largely
behind and the company should see steady
volume/earnings recovery ahead.
The stock trades at an attractive valuation of
65x versus the 10-year average of 89x. It has
upgraded the stock to ‘Buy’, with a target
price of ₹2,150 per share
Zydus Wellness|Buy |TP: ₹1,910
After a few muted quarters, hurt by adverse
summers and input cost rises, we expect a
gradual recovery with margin tailwinds from
the fall in input costs and price hikes. Intense
competition in health-food drinks and adverse
news flow/the trademark issue had a bearing
on Complan and the artificial sweetener
category, the brokerage firm said.

Foreign portfolio investors (FPIs) continued their bullish stance on the country’s debt markets with a net infusion of over Rs 18,500 crore so far this month, driven by upcoming inclusion of Indian government bonds in the JP Morgan Index.
This came following a net investment of over Rs 19,836 crore in January, making it the highest monthly inflow in more than six years. This was the highest inflow since June 2017, when they infused Rs 25,685 crore.

“With introduction of India in global bond indices this year, Indian debt inflows should get steady flows going ahead. Also, further front-loading before actual inclusion in June this year is also expected. This is also in line with long-term aim to deepen our underdeveloped debt-markets,” Kislay Upadhyay, smallcase Manager & Founder Fidelfolio, said.
On the other hand, foreign investors pulled out Rs 424 crore from equities during the period under review. Before this, they withdrew a massive Rs 25,743 crore in January, data with the depositories showed.
According to the data, FPIs made a net investment of Rs 18,589 crore in the debt markets this month (till February 23 ). With this, the total investment by FPIs reached over Rs 38,426 crore in 2024. They have been injecting money in the debt markets for the past few months.
FPIs infused Rs 18,302 crore in the debt market in December, Rs 14,860 crore in November, and Rs 6,381 crore in October. The upcoming inclusion in JP Morgan EMBIGD in June 2024 is a major driver for the huge inflow in the debt market, Bhuvan Rustagi, Co-Founder and COO, Per Annum and Lendbox, said.
Additionally, attractive yield, stable macroeconomic indicators and relatively stable rupee too attracted FPIs towards the debt market. JP Morgan Chase & Co. in September last year announced that it will add Indian government bonds to its benchmark emerging market index from June 2024.
This landmark inclusion is anticipated to benefit India by attracting around $ 20-40 billion in the subsequent 18 to 24 months. This inflow is expected to make Indian bonds more accessible to foreign investors and potentially strengthen the rupee, thereby bolstering the economy.
On equities front, FPIs pulled out Rs 424 crore so far this month, sharply down from Rs 25,744 crore in January. The resilience of the market is preventing FPIs from selling aggressively despite attractive bond yields in the US, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
Making similar statement, Bharat Dhawan, Managing Partner at Mazars in India, said the Indian market continues to captivate international interest, signifying not only the resilience of the economy but also the trust global investors place in its growth trajectory.
In terms of sectors, FPI sell-off was significant in the banking sector, as it saw lower-than-expected results in terms of net interest margins due to competition in deposit mobilization, smallcase’s Upadhyay said.
Overall, the total FPI flows for 2023 stood at Rs 1.71 trillion in equities and Rs 68,663 crore in the debt markets. Together, they infused Rs 2.4 trillion into the capital market.
The flow in Indian equities came following a worst net outflow of Rs 1.21 trillion in 2022 on aggressive rate hikes by the central banks globally. Before the outflow, FPIs invested money in the last three years.