Swatch: Citigroup estimates that about 85 per cent of its cost of goods sold is in Swiss francs. A much lower proportion of sales are at home. The broker thinks that a rise of 12 per cent to 13 per cent in the Swiss franc against the euro could wipe 8-10 per cent off its earnings. Its shares fell 16 per cent on Thursday.
Novartis, Roche, and Nestlé : a combined $750bn or so in market value — each fell by a tenth immediately after the SNB shock. It is tempting to call this excessive. These companies are based in Switzerland but their revenues and costs are overwhelmingly located elsewhere. For Nestlé and Roche, which report in Swiss francs, there will be a translation effect on the accounts: reported sales will fall by the amount the currency rises, and reported earnings by a bit more than that. But there will be no economic effect on non-Swiss operations. For Novartis, which reports in dollars, there is not even the translation effect.