Swiss Stocks Rise on EU Budget Cuts; Swiss Life Advances
Swiss stocks climbed, rebounding from their biggest tumble in 12 weeks yesterday, as Chinese trade data beat forecasts and European Union leaders proposed the first-ever cuts to the bloc’s budget.
Swiss Life Holding AG rallied the most in a month as JPMorgan Chase & Co. recommended buying shares in Switzerland’s largest life insurer. EMS-Chemie Holding AG rose to its highest price since at least 1989 after saying it will pay an extraordinary dividend of 2.50 Swiss francs a share. Emmi AG dropped 1.8 percent.
The SMI gained 0.5 percent to 7,372.85 at 10:52 a.m. in Zurich. The gauge has still slipped 0.6 percent so far this week, trimming its advance in 2013 to 8.1 percent, amid signs of political uncertainty in Spain and Italy. The broader Swiss Performance Index also increased 0.5 percent today.
The volume of shares changing hands in SMI-listed companies was 21 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.
In China, a report showed that exports and imports rose more than estimated in a January that had five working days more than last year. Exports increased 25 percent from a year earlier, the customs administration said, compared with the median economist projection of 17.5 percent. Imports climbed 28.8 percent, exceeding the 23.5 percent estimate in a Bloomberg News survey.
In Brussels, the leaders of the EU’s 27 members states convened at 6:30 a.m. today to consider a spending ceiling of 960 billion euros ($1.3 trillion) for 2014-2020, down from an original proposal of 1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle.
Switzerland’s unemployment rate remained at the highest level in almost two years in January. The jobless rate, adjusted for seasonal swings, stayed at 3.1 percent, the State Secretariat for Economic Affairs said today. That matched the median estimate of 11 economists in a Bloomberg News survey.
Swiss Life advanced 2.7 percent to 138.60 francs. Michael Huttner, an analyst at JPMorgan, raised the stock to overweight, the equivalent of buy, from neutral, citing faster earnings growth and an attractive valuation.
EMS-Chemie gained 2.2 percent to 239.90 francs after saying it will pay a total dividend of 10 francs a share. The company reported 2012 earnings before interest and taxes of 319 million francs ($348 million), beating the average analyst projection of 315.4 million francs.
“EMS-Chemie again proved its defensive qualities: reliable dividend, robust margins, rock solid balance sheet and top-line growth even in adverse market conditions,” Patrick Rafaisz, an analyst at Vontobel Holding AG, wrote in a note to clients.
Emmi lost 4.50 francs to 250.50 francs after UBS AG downgraded the dairy producer to neutral from buy, meaning investors should sell the shares. UBS cited the stocks’ recent strong rally. Emmi has jumped 8.9 percent so far this year, while the SMI has gained 8.1 percent.
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