Swiss Stocks Slide as Greek Debt-Swap Deadline Approaches

Swiss stocks fell the most since November as a report showed a contraction in the euro-area economy and investors awaited this week’s deadline for private- creditor participation in Greece’s debt restructuring.

Charles Voegele Holding AG (VCH) and AFG Arbonia-Forster Holding AG dropped more than 7 percent after reporting losses. Julius Baer Group AG and UBS AG (UBSN) led financial shares lower. Implenia AG (IMPN), Switzerland’s largest builder, climbed to an eight-month high as earnings beat estimates.

The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, sank 1.7 percent to 6,047.53 at the close of trading in Zurich, the biggest drop since Nov. 21. The decline trimmed this year’s advance to 1.9 percent. The broader Swiss Performance Index retreated 1.8 percent today.

“The real bedrock of the selloff is back to Greece,” Stephen Guilfoyle, an economist at Meridian Equity Partners in New York, said in a Bloomberg Television interview. “It’s creating a risk-off trade because of the uncertainty.”

The SMI rose less than 0.1 percent yesterday as a cut in China’s growth target and a bigger than estimated drop in euro- area manufacturing and services offset a report showing Swiss retail sales rose at the fastest pace in seven months. “The lowering of the Chinese growth target yesterday and the coming PSI D-Day in Greece leads to some profit taking after a good two months,” said Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland, referring to private sector involvement, or PSI.

Greek Debt

Investors are waiting to see how many of Greece’s private creditors agree to write down their sovereign-debt holdings by the euro area’s March 8 deadline. If the proposal wins their support, Greece will reduce its borrowings by 106 billion euros ($140 billion), lowering its debt to 120.5 percent of gross domestic product by 2020.

The Greek government has set a 75 percent participation rate as the threshold for proceeding with the transaction. The investors that so far declared their participation in the restructuring hold about 20 percent of Greek bonds.

Greece will use collective action clauses to bind holders of Greek-law bonds to accept a debt swap if it receives sufficient consents, according to a statement from the Athens- based Finance Ministry today.

The euro region’s economy contracted in the fourth quarter as investment declined the most since 2009 and exports and consumer spending also dropped.

European Growth

Gross domestic product declined 0.3 percent from the third quarter, the European Union’s statistics office said today, confirming an initial estimate published on Feb. 15. Exports fell 0.4 percent after a 1.4 percent gain in the previous three months, while household spending declined 0.4 percent and investment dropped 0.7 percent.

Charles Voegele plunged 8.9 percent to 20 Swiss francs, its biggest decline in two months, after the clothing retailer reported a full-year loss of 119 million francs ($130 million) compared with a profit of 18 million francs a year earlier.

AFG Arbonia (AFGN) slid 7.4 percent to 21.3 francs, the biggest decline since January. The maker of heaters, windows and doors posted an annual loss of 70.2 million francs.

UBS, Switzerland’s biggest bank, and Julius Baer slipped 3.7 percent to 12.15 francs and 2.2 percent to 34.39 francs, respectively. Credit Suisse Group AG (CSGN) fell 4.6 percent to 23.48 francs, the largest decrease since November.

Transocean, Adecco

Transocean Ltd. (RIG), the world’s largest offsore-rig operator, declined 3.3 percent to 46.64 francs. Adecco SA (ADEN), the biggest provider of temporary workers, fell 3.8 percent to 45.70 francs, dropping for a third day. Holcim Ltd. (HOLN), the second-largest cement maker, fell 3.8 percent to 57.75 francs.

Implenia advanced 4.6 percent to 28.70 francs, the highest level since June, after full-year earnings beat analysts’ estimates amid a local property boom and the company said the outlook for 2012 is positive.

Net income rose 17 percent to 61.4 million francs in 2011, the Dietlikon-based company said today. Earnings before interest, taxes, depreciation and amortization increased 25 percent to 140.5 million francs, topping the 115 million-franc average of three analyst estimates compiled by Bloomberg.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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