Swiss Stocks Decline, Paced by Lonza, SGS Shares; Richemont, Holcim Climb

Swiss stocks fell, led by Lonza Group AG after BofA-Merrill Lynch Global Research advised selling shares in the world’s biggest maker of drug ingredients.

Cie. Financiere Richemont SA and Swatch Group AG limited declines in the Swiss Market Index after the country’s watch makers federation said that Swiss watch exports rose 24.1 percent in August.

The SMI dropped 41.58, or 0.6 percent, to 6,420.4 at the 5:30 p.m. close in Zurich, falling for the fifth day in six. The measure gained 8.1 percent from this year’s low on July 5 to yesterday’s close as concern abated that efforts by European governments to scale back spending may tip the continent’s economy into recession. The broader Swiss Performance Index was lost 0.5 percent today.

Investors today await comments from U.S. Federal Reserve policy makers in the U.S. as to whether it will introduce measures to boost economic growth.

Basel, Switzerland-based Lonza, whose shares have gained 18 percent in 2010, lost 1.9 percent to 86.50 Swiss francs.

“We see further upside as unlikely and believe there may be downside risk to our and consensus forecasts for 2011-12 given high growth expectations in light of slowing economic growth,” Merrill Lynch analysts wrote in a report today, as they cut their recommendation on Lonza to “underperform” from “neutral.”

SGS Declines

SGS SA, the biggest goods inspector, dropped 3.3 percent to 1,638 francs after yesterday posting its biggest advance in more than two weeks. The gains pushed the shares above a Relative Strength Index level of 70, a threshold that indicates to followers of the technical indicator that a security is “overbought” and poised to drop.

Richemont, Switzerland’s largest jewelry maker, added 0.9 percent to 45.50 francs, the shares’ third advance. Swatch, the maker of Omega and Breguet watches, rose 0.5 percent to 365.50 francs, also a third straight gain. Swiss watch exports grew 24.1 percent last month, led by demand from Hong Kong, the U.S. and France, data from the Federation of the Swiss Watch Industry showed today.

Kaba Holding AG jumped 3.5 percent to 330 francs, the stock’s highest price since June 2008. Helvea SA raised its recommendation on shares of the provider of mechanical and electronic security systems to “buy,” citing a “sustainable higher operating margin going forward.” Helvea upgraded its price-estimate on the shares to 450 francs from 300 francs previously.

Holcim Ltd., the world’s second-biggest cement maker, rose 1.1 percent to 65.05 francs. Analysts at UBS AG reiterated their “buy” recommendation on the shares after the company’s management hosted a two-day investor day in St. Louis, U.S.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

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