Swiss Stocks Advance, Extending Four-Year High
Swiss stocks advanced for a third day, extending a four-year high, amid increasing optimism over revenue growth at the nation’s companies and as a slump in the Swiss franc signaled gains for exporters.
Swatch Group AG (UHR) rose after forecasting sales of 1 billion Swiss francs ($1.1 billion) from Harry Winston within five years. Geberit AG (GEBN) and Lindt & Spruengli AG (LISN) each rallied at least 2.5 percent after saying 2012 revenue increased. Swiss Re Ltd. added 0.9 percent after saying global life-insurance premiums will grow this year.
The Swiss Market Index (SMI) climbed 1 percent to 7,272.31 at the close of trading in Zurich, for the longest stretch of gains in five weeks. The gauge has surged 6.6 percent since New Year as U.S. lawmakers reached a budget compromise and averted automatic deficit-reduction measures. The broader Swiss Performance Index increased 0.9 percent today.
“It’s really a combination of two things,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “Companies giving good figures and also the foreign exchange effect.”
The franc dropped to the weakest since December 2011 against the euro amid speculation the region’s debt crisis is easing, sapping demand for the Swiss currency as a haven. The franc also fell against the U.S. dollar.
The volume of shares changing hands on SMI-listed companies was 15 percent higher than the average of the last 30 days, data compiled by Bloomberg showed.
In the U.S., where lawmakers have until the next month to raise the government’s borrowing limit, President Barack Obama said yesterday he won’t agree to link the negotiations with the debate on deficit-reduction measures.
The American Treasury has already reached the debt ceiling and resorted to emergency measures to pay for the government’s expenses. These measures will only work until mid-February to early March, Treasury Secretary Timothy F. Geithner said.
Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents, according to the Treasury. Standard & Poor’s lowered the U.S. credit rating in August 2011 after the most recent showdown over the threshold.
Data released in Washington showed that U.S. retail sales rose 0.5 percent in December, following a 0.4 percent gain in November. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 from minus 7.3 in December.
Swatch, the world’s biggest maker of Swiss watches, climbed 1.7 percent to 521.50 francs. Chief Executive Officer Nick Hayek told Le Temps newspaper that sales from the Harry Winston watch and jewelry brand, which Swatch has agreed to acquire, will reach 1 billion francs within five years.
Geberit advanced 2.8 percent to 211 francs, the highest price in 20 months. The maker of pipes and sanitary systems said revenue last year rose 3.1 percent to 2.19 billion francs, beating analysts’ estimates of 2.13 billion francs.
Lindt gained 3.2 percent to 3,260 francs, the highest price since June 2008. The maker of the Lindt chocolate bunny said 2012 sales increased 7.3 percent to 2.67 billion francs, in line with estimates.
Swiss Re added 0.9 percent to 69.50 francs. Global life insurance premiums will grow 3 percent in 2013, driven by a rebound in emerging Asian markets, The world’s second-biggest reinsurer said in a statement.
Cie. Financiere Richemont SA, the owner of the Cartier brand, rose 2.1 percent to 78.85 francs. Givaudan, the Swiss maker of perfumes and fragrances, added 0.8 percent to 991.50 francs.
Nestle SA (NESN), the world’s biggest food company, added 1.6 percent to 62.15 francs, the highest price since Oct. 17.
Syngenta AG (SYNN) rose 2 percent to 387 francs, its highest level since shares began trading in November, 2000. Bank of America’s Merrill Lynch unit raised the target price on the Swiss maker of agrochemicals to 440 francs from 380 francs citing “significant upside” to consensus earnings.
Logitech International SA (LOGN), the world’s largest maker of computer mice, slid 4.4 percent to 6.90 francs. The stock was downgraded to underperform from neutral at Credit Suisse, which said the company is “struggling to diversify from personal- computer related businesses.”
Transocean Ltd. (RIGN) dropped 1.9 percent to 49.82 francs. The world’s largest operator of offshore oil rigs gained 2.9 percent yesterday after billionaire investor Carl Icahn acquired a 1.56 percent stake.
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