Swiss Stocks Decline on Greek Uncertainty; Roche Retreats
Swiss stocks declined for a fourth day, extending a three-month low, as Greek political leaders struggled to form a government after elections that raised questions about the nation’s euro membership.
Roche Holding AG (ROG), the biggest maker of cancer drugs, fell 1.5 percent after JPMorgan Chase & Co. downgraded its recommendation for the stock. Swiss Life Holding AG (SLHN) slumped 2.2 percent as its first-quarter premiums dropped.
The Swiss Market Index (SMI) lost 1 percent to 5,977.8 at the close in Zurich. The gauge has fallen to the lowest level since Jan. 31 as Greek voters backed parties opposing austerity measures on May 6 and Francois Hollande defeated Nicolas Sarkozy to become the first Socialist in 17 years to control France. The Swiss Performance Index retreated 1.1 percent today.
“Greece is certainly an element of uncertainty once again, as it hasn’t succeeded in forming a new government and there’s a threat of new elections,” said Roland Schuermann, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “It’s surely not conducive for the situation in Europe. The sentiment is rather weak at the moment.”
New Democracy’s Antonis Samaras gave up his bid to form a government yesterday, leaving Alexis Tsipras, the head of Syriza, to attempt to build a coalition of “leftist” parties. The runner up in last weekend’s election has vowed to renegotiate the terms of the nation’s international aid.
Risk of Default
Greece has 30 days to decide whether to make an interest payment on 20 billion yen ($250 million) of 4.5 percent notes maturing in 2016, or default. Then, by May 15, officials must decide if they’re going to pay the 436 million euros ($567 million) due on a floating-rate note issued a decade ago.
Tsipras said he wouldn’t agree to join forces with New Democracy and Pasok, the two Greek parties that have supported austerity measures in return for international funds.
“The Greek election result was a vote against a barbaric bailout,” he said in statements televised live in Athens on state NET TV. “There will be no 11 billion euros of additional austerity measures; 150,000 jobs will not be cut.”
Roche fell 1.5 percent to 157 Swiss francs. Alexandra Hauber-Schuele, an analyst at JPMorgan, cut the stock to neutral, the equivalent of hold, from overweight after the company yesterday abandoned development of an experimental cholesterol drug. Roche is the third-biggest member of the SMI by weighting and contributed the most to the gauge’s decline.
Swiss Life, the nation’s largest life insurer, slid 2.7 percent to 89.45 francs. The company’s first-quarter premiums dropped 3.5 percent as sales declined in Germany, France and at its unit selling policies known as wrappers to wealthy bank clients.
Burckhardt Compression Holding AG (BCHN), the maker of compressors for the oil and chemical industry, climbed 1.6 percent to 252 francs after Volkan Gocmen, chief analyst for Swiss equities at Helvea SA, raised his price estimate for the company’s shares by 15 percent to 225 francs.
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