Stocks in Switzerland Decline as Richemont Falls on SMI

Swiss stocks were little changed after four days of gains, as a decline in Cie. Financiere Richemont SA offset a rally in Swiss Life Holding AG. (SLHN)

Richemont slipped 1.3 percent after Bank of America Corp. removed the owner of the Cartier brand from a list of most preferred luxury-goods and consumer-staples companies. Credit Suisse Group AG (CSGN), Switzerland’s second-biggest lender, lost 0.4 percent. Swiss Life jumped to a five-year high after posting an increase in sales and appointing a new chief executive officer.

The Swiss Market Index (SMI) lost 0.2 percent to 8,267.89 at 4:05 p.m. in Zurich. The gauge gained 1.6 percent in the past four trading sessions as economic reports in the U.S. and China beat forecasts. It has surged 21 percent so far this year, heading for the best annual performance since 2005. The broader Swiss Performance Index slipped 0.2 percent today.

“The situation today for Swiss stocks is investors taking a pause for breath,” said Lorne Baring, who oversees about $500 million as managing director of B Capital SA in Geneva. “The SMI, whilst not expensive, is not cheap either. We’re seeing a period of consolidation after a particularly strong run. I wouldn’t recommend adding Swiss stocks at the moment, but they are good to hold.”

The Communist Party of China’s central committee concluded its third plenary meeting to outline the direction of economic reforms, the first such gathering under the presidency of Xi Jinping. Policymakers agreed that markets should play a “decisive” role in allocating resources, the official Xinhua News Agency reported, citing a communique from the gathering.

Low Volume

The volume of shares changing hands in SMI-listed companies was 13 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Richemont dropped 1.3 percent to 91.60 Swiss francs as Bank of America’s Merrill Lynch unit replaced the company with Carlsberg A/S on its list of most preferred consumer staples and luxury stocks.

Credit Suisse declined 0.4 percent to 26.68 francs, paring earlier losses of as much as 1.5 percent. Chief Executive Officer Brady Dougan said in an interview with Basler Zeitung newspaper that it was “impossible to say when there will be a solution” to tax disputes with the U.S.

The Department of Justice is probing 14 Swiss banks including Credit Suisse as part of a crackdown on financial-services firms suspected of helping Americans hide money from the Internal Revenue Service.

Swiss Life rallied 6.1 percent to 190.80 francs, its highest price since September 2008. Switzerland’s biggest life insurer said Chief Investment Officer Patrick Frost will replace Bruno Pfister as CEO on July 1. Pfister will step down after six years of heading the company. Third-quarter sales rose 8 percent to 3.29 billion francs ($3.6 billion), the insurer said.

Lonza Group AG (LONN) climbed 2.5 percent to 87.55 francs after Vontobel Holding AG raised its recommendation on the drug-ingredients maker to buy from hold, predicting an increase in the earnings contribution of the company’s biopharmaceuticals business until 2015.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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