Swiss Stocks Climb to Highest Level Since July; Nestle Advances
Swiss stocks rose to their highest level in six months as the International Monetary Fund said it plans to increase its lending resources to protect the global economy from any worsening of the euro area’s debt crisis.
Nestle SA (NESN), the world’s biggest food company, added 1.2 percent after HSBC Holdings Plc recommended the shares. Transocean Ltd. (RIG), the owner of deepwater oil rigs and swamp barges, climbed. Julius Baer Group Ltd. (BAER) added 1.4 percent as the wealth manager said it sees opportunities to acquire the Swiss units of international banks.
The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, advanced 1 percent to 6,116.23 at the close of trading in Zurich, extending its rally this year to 3 percent. The index fell 7.8 percent in 2011 as Europe’s sovereign-debt crisis spread from Greece to Italy and Spain. The broader Swiss Performance Index rose 0.9 percent today.
The IMF will propose to expand its lending resources after identifying a potential need for $1 trillion in financing. The Washington-based lender will push China, Brazil, Russia, India, Japan and oil-exporting nations to contribute the most, according to an official from a Group of 20 country. The fund wants to strike the agreement at the Feb. 25-26 meeting of G-20 finance ministers and central bankers in Mexico City.
Global Growth Forecast
The World Bank cut its global growth forecast in its Global Economic Prospects report which it released today in Asia. The institution said that a recession in the euro area threatened to exacerbate a slowdown in emerging markets such as India and Mexico.
The world economy will grow 2.5 percent in 2012, down from a June estimate of 3.6 percent, the Washington-based institution said. The euro area may contract 0.3 percent, compared with a previous estimate for a 1.8 percent gain. The World Bank cut its projection for U.S. growth to 2.2 percent from 2.9 percent.
“Even achieving these much weaker outturns is very uncertain,” the report said. “The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce one another, resulting in an even weaker outcome.”
Greek Debt Deal
Greece will agree a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt, according to Bruce Richards, the chief executive officer for Marathon Asset Management LP. Richards sits on the committee of 32 private creditors that formed in November to negotiate with Greece, the International Monetary Fund and the European Union.
Nestle increased 1.2 percent to 53.90 Swiss francs for the biggest contribution to the SMI’s climb as Cedric Besnard, an analyst at HSBC, upgraded the stock to “overweight” from “neutral” after European markets closed yesterday.
Transocean added 2.6 percent to 40.44 francs as crude traded at its highest price in three days.
Julius Baer increased 1.4 percent to 36.76 francs after Chief Executive Officer Boris Collardi said he sees opportunities to acquire the local units of international banks, according to an interview with Finanz und Wirtschaft. The Swiss financial market faced consolidation, job cuts and salary reductions, Collardi told the newspaper.
Swatch Group AG (UHR) gained 1.6 percent to 386.10 francs, its highest price since Oct. 28, and Cie. Financiere Richemont SA climbed 1.6 percent to 52.55 francs, its highest since July 26.
Swiss watch exports will probably climb to record levels this year, though growth may slow to a “single-digit” pace, Jean-Daniel Pasche, the head of the Federation of the Swiss Watch Industry said.
Swisscom AG (SCMN), Switzerland’s largest telecommunications company, gained 1.5 percent to 366.20 francs after Deutsche Bank AG raised the company’s shares to “buy” from “hold.”
Orascom Development Holding AG (ODHN) jumped 3.9 percent to 14.55 francs after saying it completed a credit agreement for 125 million francs ($132 million) to fund its activities in 2012.
To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
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