Most Swiss Stocks Decline After Greek Aid Agreement

Most Swiss stocks retreated as investors weighed euro-area leaders’ agreement on a second aid package for Greece.

ABB Ltd. (ABBN), the world’s biggest power-grid supplier, slipped 1.3 percent. Zurich Financial Services and Swiss Life Holding AG (SLHN) slid more than 1.5 percent. Schindler Holding AG (SCHP) climbed 1.1 percent after forecasting a higher profit in 2012. Uster Technologies Ltd. jumped to a four-year high after Toyota Industries Corp. raised its offer for the company.

The Swiss Market Index (SMI), a measure of Switzerland’s biggest and most actively traded companies, fell 0.1 percent to 6,237.82 at the close in Zurich. More than two shares retreated for each that gained. The gauge has still advanced 5.1 percent this year as the European Central Bank increased lending to banks and U.S. economic reports topped forecasts. The broader Swiss Performance Index lost 0.3 percent today.

“It remains unclear if the Greek tragedy has ended permanently,” Viola Stork, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in a report today. “What is decisive is not the approved reform measures and the financial assurances, but the implementation of reforms and increasing the competitiveness of the country.”

European finance ministers approved a 130 billion-euro ($173 billion) bailout package for Greece. The deal includes a 53.5 percent writedown for investors in the nation’s debt, according to Luxembourg’s Jean-Claude Juncker, who led the talks in Brussels.

Deal Implementation

The odds that Greece will remain encumbered by debt were illustrated by an analysis by European and International Monetary Fund officials that highlighted what could go wrong with a country unable to grow out of its fiscal woes by devaluing its currency.

“Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it,” the analysis said. In a worst-case scenario Greece’s debt might balloon to 160 percent of gross domestic product in 2020, it concluded.

The deal is “looking more and more like a ‘buy the rumor, sell the fact’ type event,” said Chris Weston, an institutional trader at IG Markets in Melbourne.

Swiss exports, adjusted for inflation and seasonal swings, fell 3.4 percent in January from the previous month, when they gained a revised 6.4 percent, the Federal Customs Office in Bern said today.

ABB, Zurich Financial

ABB fell 1.3 percent to 19.04 francs as a gauge of European industrial goods companies was among the worst performers of the 19 industry groups in the Stoxx Europe 600 Index (SXXP).

Zurich Financial, Switzerland’s largest insurer, lost 1.6 percent to 225.80 francs. Swiss Life declined 1.7 percent to 101.70 francs and Baloise Holding AG (BALN) dropped 1.9 percent to 73.10 francs.

Schindler rose 1.1 percent to 110.20 francs after the maker of escalators said full-year net income fell to 611 million francs from 711 million francs a year earlier, citing a strong franc and restructuring costs. The average analyst estimate in a Bloomberg News survey called for 613 million francs. The company also said it expects to achieve “significantly higher” net income for 2012.

Uster Technologies rallied 5.3 percent to 46.05 francs, its highest since January 2008, after Toyota raised its offer price for the supplier of textile testing instruments to 44 francs a share. Uster said it’ll recommend the increased offer to its shareholders.

Novartis, Transocean Climb

Novartis AG (NOVN) rose 1.3 percent to 52.40 francs after the company agreed to pay as much as $440 million for the rights to an experimental drug against hepatitis C, joining Gilead Sciences Inc. and Bristol-Myers Squibb Co. in seeking deals to gain medicines against the virus.

Transocean Ltd. (RIG), the world’s biggest operator of offshore drilling rigs, advanced 4.1 percent to 45.35 francs as Alan Laws, an analyst at BMO Capital Markets in Denver, recommended “buying the dip,” saying the company is now better positioned to settle its disputes with BP Plc as the dividend funding no longer affects free cash flow. The stock dropped the most in more than two months yesterday after saying it won’t recommend a dividend payment at its 2012 annual shareholder meeting.

Burckhardt Compression Holding AG (BCHN), the maker of compressors for the oil and chemical industry, climbed 4.8 percent to 262 francs, its highest price since July, after Goldman Sachs Group Inc. added the stock to its “conviction buy” list and raised its price estimate for the stock by 21 percent to 350 francs.

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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