Swiss stocks dropped after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank may expand its bond-buying program and concern lingered that more European nations will struggle to finance themselves.
UBS AG (UBSN), Switzerland’s largest bank, led the retreat, falling 1.6 percent, after saying Chief Financial Officer John Cryan will leave next year. Lonza Group AG (LONN) and Syngenta AG (SYNN) limited losses in the Swiss Market Index (SMI) after Goldman Sachs Group Inc. recommended European chemicals companies.
The SMI of the biggest and most actively traded companies fell 0.5 percent to 6,412.22 at the 5:30 p.m. close in Zurich. The SMI posted a second straight weekly loss last week, falling 0.7 percent, after the bailout of Ireland failed to reassure investors that Europe will contain its sovereign-debt crisis. The broader Swiss Performance Index (SPI) slid 0.3 percent today.
“Equities do look cheap but the bearish argument is: are all the world problems going to supercede the bullish argument?” Simon Denham, chief financial officer at London Capital Group Holdings Plc, said. “In the current environment, I can see no reason why people would invest in equities.”
U.S. policy makers may expand bond purchases beyond the $600 billion announced last month to spur growth, Fed Chairman Bernanke said in an interview broadcast yesterday by CBS Corp.’s “60 Minutes” program.
“We’re not very far from the level where the economy is not self-sustaining,” Bernanke said. “It’s very close to the border. It takes about 2.5 percent growth just to keep unemployment stable and that’s about what we’re getting.”
UBS, Credit Suisse Fall
UBS dropped 1.6 percent to 15.46 Swiss francs. Tom Naratil will replace Cryan while Sergio Ermotti will join from UniCredit SpA on April 1 to run Europe, the Middle East and Africa, the bank said at the end of last week after markets closed.
Naratil, the CFO and chief risk officer of UBS’s wealth-management Americas unit, will replace Cryan, on June 1. Cryan, CFO since September 2008, will “pursue other interests outside of UBS,” the Zurich-based bank said.
Credit Suisse Group AG (CSGN), Switzerland’s second-largest bank, fell 1.8 percent to 38.02 francs.
Lonza, the world’s biggest maker of drug ingredients, jumped 2.9 percent to 81.10 francs. Syngenta, Europe’s biggest maker of chemicals, climbed 1.5 percent to 283 francs.
Goldman Sachs raised its price forecast for Lonza shares to 95 francs from 83 francs previously, and its prediction for Syngenta to 410 francs from 325 francs, as the U.S. bank upgraded its stance on European chemicals stocks to “neutral” from “cautious.”
“We expect returns in the European chemicals sector to improve further, to record levels, as a result of structural factors including portfolio change, restructuring and revised strategic approaches,” Goldman Sachs analysts wrote.
Winterthur Technologie AG surged 6.9 percent to 62 francs. 3M Co. (MMM), the maker of Scotch tape and optical films used to brighten TV screens, agreed to buy Winterthur Technologie for $448 million to expand in abrasive and grinding tools.
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