Novartis ophthalmology partner Alcon joins SMI


DThis is what we call collateral damage: the asset manager Julius Baer loses his place in the Swiss Market Index (SMI), the main index of the Swiss stock exchange. "Guilt" is supported by Novartis. The Basel pharmaceutical company is divesting its Alcon subsidiary and bringing them separately to the stock market. As of April 9, the actions of the ophthalmologist will be listed in Zurich.

John Knight

Alcon is not a small stall, but a corporation with 20,000 employees and more than $ 7 billion in sales. Analysts have estimated the company's market value at $ 20-22 billion. Therefore, it is clear that Alcon will be immediately included in SMI, which lists the 20 most important companies in Switzerland. As announced by the Swiss Stock Exchange, Julius Baer leaves the SMI with effect from April 10. Zürcher Bank is now included in the SMIM index, which comprises 30 titles. To do this, the actions of the Aryzta bakery group must exit the SMIM.

These changes may influence the development of stock prices of the undertakings concerned. There are many investors and funds that buy all the shares represented at a certain index. As soon as a company leaves this index, the investors also participate in the corresponding actions.

And they are investing in a company that is re-entering the index. Also for the Novartis stock market price, all stock will have consequences. The company divides 100% of Alcon, with each shareholder receiving one share of Alcon for five shares of Novartis. From a purely mathematical standpoint, the Novartis stock market value on the April 9th ​​reporting date would have to be reduced by the exact value of the divided Alcon. As Alcon's market price develops, it depends on whether the new shareholders, ie the former owners of Novartis (for the time being) hold or sell their allocated shares.


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