Swiss Stocks Rise on Watch-Exports Forecast, Alcoa Sales
Swiss stocks advanced, extending a four-year high, as Vontobel Holding AG boosted its forecast for watch exports and Alcoa Inc. began the U.S. earnings season with sales than topped estimates.
Swatch Group AG and Cie. Financiere Richemont SA paced watchmakers higher, both climbing to a record, as Vontobel increased its 2013 projection for exports of Swiss timepieces. Zurich Insurance Group AG (ZURN) rose 1.6 percent after Credit Suisse Group AG (CSGN) recommended the shares.
The Swiss Market Index (SMI) added 1.1 percent to 7,151.6 at the close in Zurich, the highest since September 2008. The gauge rallied 3.5 percent last week, the biggest jump in 13 months, as U.S. lawmakers approved a compromise budget that avoided most scheduled deficit-reduction measures. The broader Swiss Performance Index advanced 1 percent today.
“Swatch is a really first-class opportunity for investors; there is ample free cash flow, it’s a product people want to buy, and it’s a product that’s able to maintain it’s margins,” James Bevan, chief investment officer at CCLA Investment Management Ltd. in London, said in a Bloomberg Television interview. “What I find fascinating about the Far East markets in particular is how they all want new. There is no interest in having a second-hand product, or your father’s watch.”
The number of shares changing hands in SMI-listed companies today was more than double the average of the past 30 days, according to data compiled by Bloomberg.
Alcoa, the largest U.S. aluminum producer, unofficially kicked off the earnings season late yesterday when it became the first member of the Dow Jones Industrial Average to report. The company posted fourth-quarter sales of $5.9 billion, beating the $5.6 billion average analyst estimate in a Bloomberg survey.
German industrial production gained in November for the first time in four months, a report from the Economy Ministry in Berlin showed. Output increased 0.2 percent, after a revised drop of 2 percent a month earlier. Economists had forecast a gain of 1 percent, according to the median estimate of economists in a Bloomberg survey.
Swatch rose 1.3 percent to 499.80 Swiss francs, the highest price since at least 1993. Richemont, the world’s second-largest luxury-goods company, surged 4.5 percent to 77.65 francs, the highest since at least 1990.
Vontobel raised its 2013 growth estimate for Swiss watch exports to 8 percent from 6 percent, citing a November rebound in Hong Kong watch and jewelry retail sales.
Zurich Insurance added 1.6 percent to 253 francs as Credit Suisse raised the shares to outperform, the equivalent of buy, from neutral. Switzerland’s biggest insurer is less reliant on investment returns to drive earnings than Germany’s Allianz SE, giving insulation from “the ongoing low yield environment,” analysts led by Richard Burden wrote in a report.
UBS AG (UBSN) soared 4.1 percent to 15.71 francs, the highest since June 2011, as a gauge of lenders had the second-best performance among 19 industry groups in the Stoxx Europe 600 Index. Andrea Orcel, chief executive officer of UBS’s investment bank, appeared before a parliamentary hearing in London today after lender was fined $1.5 billion for trying to rig global interest rates.
Credit Suisse rallied 2.6 percent to 24.96 francs, a nine-month high.
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