Swatch Group AG, the owner of the Omega and Longines brands, led declines among shares of Swiss watchmakers after a report showed Switzerland exported fewer timepieces in May, the first drop in three months.
The stock fell as much as 5.2 percent, the steepest intraday decline in a year. The shares traded 3.9 percent lower at 513.50 francs as of 10:52 a.m. in Zurich. Richemont, the maker of Cartier and Vacheron Constantin watches, declined as much as 3.8 percent.
Shipments of Swiss timepieces and watch components to other countries fell 3.9 percent to 1.84 billion francs ($1.97 billion) last month, with exports to Hong Kong, China and France, three of the largest markets, declining more than 10 percent, the Federation of the Swiss Watch Industry said today on its website. Watches wholesaling for more than 3,000 francs had their first annual drop in three years in May.
China’s clampdown on corruption and extravagant spending among government officials is “likely to limit the recovery of the illegitimate component of luxury demand this year,” Thomas Chauvet, an analyst at Citigroup, said in a note to investors. “This is likely to have a greater impact on the high-end rather than the mid-range segment. Nonetheless, we do not think a severe destocking cycle will take place as in the last Swiss watch industry downturns in 2008-09 and 2001-03.”
Exports of timepieces from the country rose 1.7 percent in the first five months of the year, the trade group said.
The figures were “disappointing overall,” said Allegra Perry, an analyst at Cantor Fitzgerald in London.