Swiss Stocks Post Biggest Drop in Three Weeks on Cyprus
Swiss stocks retreated the most in three weeks as Cypriot lawmakers continued to wrangle over a bank-deposit levy, outweighing a report that showed housing starts in the U.S. exceeded economists’ forecasts.
Cie. Financiere Richemont SA, the owner of the Cartier brand, dropped the most in eight weeks. Baloise Holding AG, the 150-year-old insurer, declined. Partners Group Holding AG (PGHN) climbed to the highest price since its initial public offering in 2006 after posting full-year profit that rose 27 percent.
The Swiss Market Index (SMI) slipped 0.5 percent to 7,789.6 at the close of trading in Zurich, after earlier advancing as much as 0.2 percent. The equity benchmark last week climbed to its highest level since January 2008, as reports pointed to a strengthening global economy amid ongoing speculation that central banks will maintain stimulus. The broader Swiss Performance Index lost 0.6 percent today.
“The Cypriot situation is causing uncertainty on the markets, but we’re not seeing dramatic losses and investors may just see it as a good opportunity to take profits,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva, which oversees about $28 billion. “In all likelihood, the Eurogroup will relax its requirement in terms of tax on bank deposits and calm should gradually return to the markets.”
Cypriot lawmakers began debating how to spread the proposed charge on bank deposits among account holders. The levy, announced on March 16, sparked concern among investors by breaking the taboo against raiding bank accounts. Cyprus’s banks will remain closed today and tomorrow.
Parliament will probably reject the proposals, Cyprus President Nicos Anastasiades told Sweden’s TV4 channel in an interview today. The legislature may not vote on the levy today, according to Defense Minister Fotis Fotiou.
The euro area’s finance ministers said that Cyprus could extract more of the levy from the largest depositors. The original plan had set a 6.75 percent charge on deposits under 100,000 euros ($128,000) and 9.9 percent on larger sums.
In the U.S., a Commerce Department report showed that builders broke ground on 917,000 properties at an annual rate, up 0.8 percent from a 910,000 pace in January that was higher than initially estimated. Building permits, a proxy for future construction, increased to 946,000, the most since June 2008.
Richemont fell 4.3 percent to 76.10 Swiss francs, the worst performance on the SMI, as a shareholder sold about 7 million shares for 539 million francs ($569 million). Goldman Sachs Group Inc. placed the stake at 77 francs apiece, according to two people familiar with the transaction.
Swatch Group AG, the largest maker of Swiss watches, declined 3.4 percent to 531.50 francs.
Baloise (BALN) slipped 1.1 percent to 89.70 francs after lowering its target for return on equity. Switzerland’s third-biggest insurer reduced its return-on-equity target to a range of 8 percent to 12 percent from a previous goal of 15 percent because of declining interest rates.
Kaba Holding AG (KABN) retreated 3.2 percent to 358.50 francs after UBS AG cut the stock to neutral from buy, saying that the company has lost market share.
“We struggle with the company’s top-line development,” Torsten Wyss, an analyst at UBS AG, wrote in a report today. “We don’t believe Kaba will be able to meet its full-year 2012-13 and 2013-14 sales growth targets.”
Clariant AG (CLN) slid 1.7 percent to 14.08 francs, the biggest decline on a gauge of European chemical makers. Syngenta AG, the world’s largest agrochemical company, slipped 1.3 percent to 402.90 francs.
Partners Group rallied 4.4 percent to 233.30 francs. The Swiss asset manager said net income increased to 257 million francs in 2012, from 202 million francs in 2011.
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