Swiss Stocks Slide the Most in 20 Months as UBS Retreats
Swiss stocks plunged the most in 20 months as equities fell around the world amid concern the Federal Reserve will scale back its bond purchases, while a report showed Chinese manufacturing contracted.
Cie. Financiere Richemont SA, the owner of the Cartier brand, posted the biggest decline on the benchmark Swiss Market Index. (SMI) UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s two largest banks, fell at least 3.5 percent. Logitech International SA (LOGN), the world’s biggest maker of computer mice, rose 2.2 percent after its chief executive officer announced a dividend and gave sales forecasts that exceeded estimates.
The SMI slid 2.8 percent to 8,168.52 at the close in Zurich, its largest tumble since Sept. 22, 2011. The equity benchmark rose to its highest level since December 2007 yesterday. The gauge has rallied 20 percent so far in 2013, its best start to a year since 1998. The broader Swiss Performance Index lost 2.7 percent today.
“This is a correction within a bull market; now the question is how many days can it last?” said Luis Benguerel, a trader at Interbrokers Espanola de Valores in Barcelona. “Investors should at one point see this as an opportunity to add positions in equities.”
The Swiss franc strengthened the most against the euro since the day before the central bank imposed its cap on the currency in 2011 as the prospect of a reduction in U.S. monetary stimulus boosted demand for haven assets. The Swiss franc advanced as much as 1.3 percent to 1.2420 per euro, its biggest gain since Sept. 5, 2011.
The volume of shares changing hands in SMI-listed companies was 45 percent greater than the daily average of the past 30 days, according to data compiled by Bloomberg.
The Standard & Poor’s 500 Index lost 0.8 percent yesterday after Fed Chairman Ben S. Bernanke signaled that the U.S. central bank will scale back stimulus if the recovery improves. Bernanke made the comments in testimony to the Joint Economic Committee of Congress in Washington. The equities index fell 0.4 percent as Swiss trading ended today.
Switzerland’s exporters fell after a report showed China’s manufacturing output shrank for the first time in seven months. The preliminary reading for May of 49.6 for the purchasing managers’ index released by HSBC Holdings Plc and Markit Economics compared with a final 50.4 for April. The number missed the 50.4 median estimate in a Bloomberg survey of 13 analysts. A reading below 50 means activity contracted.
Richemont, which also owns Alfred Dunhill, declined 5 percent to 88.15 Swiss francs, its biggest drop in four months. Swatch Group AG, the biggest maker of Swiss watches, retreated 3.1 percent to 575 francs. ABB Ltd. (ABBN), the world’s largest maker of power transformers, fell 2.8 percent to 21.41 francs.
UBS, Switzerland’s largest bank, dropped 3.8 percent to 17.32 francs. Credit Suisse, the second-biggest, decreased 3.5 percent to 28.10 francs. Julius Baer Group Ltd. (BAER), Switzerland’s third-largest wealth manager, fell 4.5 percent to 37.72 francs.
Swiss Life Holding AG (SLHN) declined 2.1 percent to 158 francs, its first drop in four days, even as Switzerland’s biggest life insurer said its premiums climbed 14 percent in the first quarter. Gross premiums rose to 6.97 billion francs ($7.2 billion) from 6.11 billion francs a year earlier, the Zurich-based company said in a statement. The shares had surged 33 percent this year before today.
Logitech added 2.2 percent to 6.56 francs. The company plans to pay a recurring annual dividend starting this year and may consider buybacks, CEO Bracken Darrell said at an investor day. The company said it will pay a dividend of 21 centimes a share. Logitech also forecast sales of $2.1 billion in 2015 and $2.25 billion in 2016. The average analyst estimate had called for revenue of $2 billion and $2.03 billion, respectively.
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