Stocks in Switzerland Gain; Transocean Rallies on Icahn
Stocks in Switzerland climbed, extending a 4 ½-year high, as Chinese industrial profits increased and a report showed U.S. durable-goods orders rose more than forecast in December.
Transocean (RIGN) Ltd. rallied 4.2 percent after billionaire investor Carl Icahn said the world’s biggest offshore-rig contractor should declare a $4-a-share dividend. UBS AG, Switzerland’s largest lender, advanced 1.4 percent after Credit Suisse Group AG (CSGN) said it’s one of its most-preferred investment bank stocks. Geberit (GEBN) AG dropped 1.6 percent.
The Swiss Market Index (SMI) added 0.3 percent to 7,483.95 at the close of trading in Zurich, its highest level since June 2008. The gauge increased 1.2 percent last week as the Swiss franc weakened against the euro and the U.S. House of Representatives voted to suspend the government’s borrowing limit. The broader Swiss Performance Index also gained 0.3 percent today.
“This is further positive data that confirms the rebound in the U.S. economy,” Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail regarding the durable-goods orders. “This should translate in positive returns for world equities and also show that the worst is over for global tail risks.”
The volume of shares changing hands in SMI-listed companies was 11 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.
Chinese industrial companies’ profits rose 17 percent to 895 billion yuan ($144 billion) in December from a year earlier, the National Bureau of Statistics said yesterday in Beijing.
Orders for durable goods in the U.S. rose 4.6 percent in December after a 0.8 percent gain the prior month, a Commerce Department report showed today in Washington. Excluding demand for transportation equipment, which is volatile month to month, orders rose 1.3 percent.
The median forecast of 76 economists surveyed by Bloomberg called for a 2 percent gain in overall orders.
Separate data showed pending U.S. home sales declined in December for the first time since August. The index of contracts for the purchase of previously owned homes fell 4.3 percent to 101.7 after a revised 1.6 percent increase, the National Association of Realtors reported today in Washington. The median forecast in a Bloomberg survey projected no change in the gauge. Compared with a year earlier, pending sales before seasonal adjustment climbed 4.9 percent.
Transocean climbed 4.2 percent to 54.10 francs, its highest price since July 2011. Icahn, who holds a 5.61 percent stake in the company, said he will propose the $4-a-share dividend at the next meeting if the board doesn’t act.
UBS (UBSN) increased 1.4 percent to 16.31 francs. “This year we expect the focus to be on the deleveraging costs,” Credit Suisse’s Amit Goel wrote in a note to clients today. “Even if there are hiccups along the way, we expect the market to view this as an opportunity, as these processes are rarely smooth.”
Julius Baer Group Ltd. (BAER) rose 0.8 percent to 37.62 francs. A gauge of European lenders posted the best performance of the 19 industry groups in the Stoxx Europe 600 Index.
Geberit, a maker of toilets and bathroom piping systems, declined the most since October, falling 1.6 percent to 215 francs.
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