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Swiss Stocks Rally to Five-Year High; Swatch Gains

Swiss stocks climbed to their highest level since February 2008 as bank shares advanced, offsetting a decline in the shares of Geberit AG.

Swatch Group AG (UHR) and Cie. Financiere Richemont SA led gains. UBS AG rose as a person familiar with the matter said the lender has held talks to buy Italy’s Banca Intermobiliare di Investimenti e Gestioni SpA. Geberit fell the most in more than four months as the maker of toilets and bathroom-piping systems predicted a difficult year for the construction industry.

The SMI added 0.6 percent to 7,802.93 at the close of trading in Zurich, its highest level since February 2008. The SMI rallied 1.9 percent last week as the unemployment rate fell in the U.S. and speculation mounted that central banks around the world will continue to support economic recovery. The broader Swiss Performance Index increased 0.5 percent today.

“The equities market in Europe seems to be only trading one way: up,” Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote. “No amount of bad news is seemingly able to derail this progress.”

The volume of shares changing hands in shares listed on the SMI (SMI) was 23 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

European Union leaders will meet at a summit in Brussels on March 14-15 to discuss the terms of a bailout for Cyprus. These include the nation’s debt sustainability and whether to impose losses on depositors.

Swatch, Richemont

Swatch, the largest maker of Swiss watches, gained 0.9 percent to 545 francs as Societe Generale SA rated the shares new buy, forecasting a target price of 650 francs for the shares. Richemont increased 1.4 percent to 78.65 francs as the French bank rated the stock new buy, setting a target price of 95 francs.

UBS AG (UBSN) added 0.3 percent to 15.14 Swiss francs. The stock earlier rose as much as 0.9 percent. Switzerland’s biggest lender has held talks to buy Banca Intermobiliare as it seeks to expand its private-banking business, according to a person familiar with the discussions.

Credit Suisse Group AG (CSGN), Switzerland’s second-largest lender, climbed 0.7 percent to 26.27 Swiss francs.

EFG Financial Products Holding AG (FPHN) surged 6.5 percent to 52.50 francs, the biggest jump since its initial public offering in October, after Notenstein Private Bank agreed to buy a 20.25 percent stake in the financial-services firm from EFG International AG. (EFGN)

Notenstein, which is owned by St. Gallen, Switzerland-based Raiffeisen Group, agreed to buy the stake for 70.2 million francs ($74 million), according to an e-mailed statement from EFG International today.

Geberit (GEBN) fell 1.9 percent to 227.40 francs. The toilet maker said that the European construction industry will probably contract this year. The company generates more than 90 percent of its sales from Europe. Geberit also said it will pay a dividend of 6.60 francs per share.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

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

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