Swiss Stocks Advance as Cyprus Reaches Bailout Agreement
Swiss stocks rose, snapping two days of losses, as Cyprus and euro-area finance ministers agreed on a rescue package, dodging the risk of a default and an exit from the currency union.
Syngenta AG posted the best performance on the Swiss Market Index, while Roche Holding AG (ROG), the world’s biggest maker of cancer drugs, contributed the most to the benchmark index’s gain. Meyer Burger (MBTN) Technology AG slumped to its lowest price this year as it posted a full-year loss and announced that it will sell new shares.
The SMI (SMI) added 0.2 percent to 7,758.22 at the close of trading in Zurich, after earlier advancing as much as 0.9 percent. The gauge retreated 1.5 percent last week, its first loss in six weeks and the biggest drop since Nov. 16. The SMI has still climbed 14 percent this year. The broader Swiss Performance Index also gained 0.2 percent today.
“There was some uncertainty in the markets before the Cyprus deal,” said Peter Buergler, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Some market participants saw the difficulties in Cyprus as an opportunity to push share prices lower. Now that the uncertainty has moved to the background, the liquidity, which is still around, flows back into the markets.”
The volume of shares changing hands in companies on the SMI was 2.5 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.
Cyprus won a 10 billion-euro ($13 billion) international bailout after agreeing late yesterday to shrink its banking system, instead of a previous demand to impose a levy on all bank accounts. The accord with the troika of the European Central Bank, the European Commission and the International Monetary Fund was ratified by finance ministers from the 17- member euro area.
President Nicos Anastasiades agreed to shut down Cyprus Popular Bank Pcl, the country’s second-largest lender. The Bank of Cyprus Plc will take over viable assets of the failed lender, along with 9 billion euros in emergency loans, according to three European Union officials familiar with the matter.
The revised accord spares bank accounts with less than the insured limit of 100,000 euros. A loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.
Swiss stocks pared some of their gains after Reuters reported that Eurogroup chairman Jeroen Dijsselbloem said the Cyprus bank restructuring plan should be seen as a template for the rest of the euro area.
Syngenta, the world’s largest maker of crop sprays, gained 1 percent to 400 francs.
Roche added 0.6 percent to 218.80 francs. Chugai Pharmaceutical Co Ltd., a Roche unit, said Japan’s Ministry of Health approved Actemra injections for rheumatoid arthritis that does not respond sufficiently to one or more existing therapies.
“The approval of a subcutaneous formulation of Actemra in Japan is likely to be followed by a respective approval later this year also in the U.S. and in Europe,” Olav Zilian, an analyst at Helvea SA in Geneva, wrote in a report.
Meyer Burger slid 5 percent to 6.66 francs after saying it will raise 150 million francs ($158 million) by selling new stock to existing shareholders. The solar-equipment maker reported a full-year net loss of 2.33 francs per share.
“Meyer Burger’s performance and outlook reflect the ongoing gloomy state of the solar market,” Michael Foeth, an analyst at Vontobel Holding AG in Zurich, wrote in a note to clients today. “The wave of consolidation and bankruptcies is now hitting China. While Meyer Burger is not at risk in the next 12 months, the dry stretch is likely to continue even if management expects significant increases in order intake during 2013. Uncertainty remains high and we continue to advise staying on the sidelines.”
Gottex Fund Management Holdings Ltd. (GFMN) retreated 4.6 percent to 2.67 francs after reporting a full-year operating loss of $4.1 million.
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