Swiss Stocks Climb for Second Day Amid China Optimism; SGS Gains
Swiss stocks advanced for a second day on speculation that the slowest economic growth in more than two years in China may lead to an easing of monetary policy.
SGS SA (SGSN) jumped 1.5 percent after saying it would buy back shares. Credit Suisse Group AG (CSGN), Switzerland’s second-biggest bank, climbed 2.9 percent, leading financial shares higher. Holcim Ltd. (HOLN), the world’s second-largest cement maker, gained 2.2 percent.
The Swiss Market Index (SMI), a measure of the biggest and most actively traded companies, added 0.4 percent to 6,056.17 at the close of trading in Zurich, gaining 2 percent this year. The index fell almost 8 percent in 2011 as Europe’s sovereign-debt crisis spread from Greece to Italy and Spain. The broader Swiss Performance Index increased 0.5 percent today.
China’s economy expanded at the slowest pace in 10 quarters as Europe’s debt crisis curbed export demand and the property market weakened, sustaining pressure on Premier Wen Jiabao to ease monetary policy.
Gross domestic product rose 8.9 percent in the fourth quarter from a year earlier, the statistics bureau in Beijing said today. Growth exceeded the 8.7 percent median of 26 estimates in a Bloomberg survey.
The People’s Bank of China said it injected 169 billion yuan ($26.8 billion) into the financial market through 14-day reverse-repurchase operations at 5.47 percent, according to a statement on the bank’s website.
“European markets are likely to get a massive lift from the data out of China, which has been highly supportive of risk assets,” Stan Shamu, a market strategist at IG Markets in Melbourne, wrote in a note.
SGS advanced 1.5 percent to 1,650 francs. The company said it may buy back as much as 250 million francs ($264 million) of shares. SGS reported net income of 534 million francs, in line with analyst estimates, and proposed a total dividend of 65 francs a share.
“With the strong annual results, SGS has demonstrated what growth potential lies both within the company as well as in the sector,” Daniel Buerki, an analyst at Zuercher Kantonalbank, wrote in a note to clients today. He raised the stock to “overweight” from “market weight.”
Financial shares advanced, with Credit Suisse climbing 2.9 percent to 22.01 francs. Zurich Financial Services AG (ZURN), the country’s largest insurer, increased 0.5 percent to 222 francs while Swiss Life Holding AG (SLHN) gained 1.3 percent to 90.85 francs.
Holcim added 2.2 percent to 52.10 francs as a gauge of European construction companies was among the best performers of the 19 industry groups in the Stoxx Europe 600 Index. Holcim and Bunker Hills Investments Ltd. were offered an extra 14 percent of Afrisam Ltd., South Africa’s second-largest cement producer, for 940 million rand ($117 million).
Clariant AG (CLN) rallied 3.2 percent to 11.44 francs. The company sold 500 million euros of five-year bonds, priced to yield 407.5 basis points more than the benchmark mid-swap rate.
Dufry SA, the operator of duty-free shops, surged 6 percent to 102 francs after Patrick Jnglin, an analyst at Credit Suisse, reiterated his “outperform” rating on the stock and raised his price estimate to 125 francs from 115 francs.
Petroplus Holdings AG, Europe’s largest independent refiner by capacity, slumped 6.2 percent to 1.37 francs after Standard & Poor’s cut its long-term rating to CC from CCC+ after the suspension of credit lines forced the company to scale back operations.
Logitech International SA (LOGN), the world’s biggest maker of computer mice, dropped 1.2 percent to 7.33 francs after Paul Coster, an analyst at JPMorgan Chase & Co., cut the company’s shares to “underweight” from “neutral.”
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