Stocks in Switzerland Are Little Changed; UBS Shares Drop
Swiss stocks closed little changed, with the benchmark gauge heading for its second monthly gain, as investors awaited the outcome of a two-day Federal Reserve policy meeting.
Nestle SA (NESN) dropped, for the biggest drag on the benchmark gauge. UBS AG (UBSN) declined 1.4 percent. Sika AG surged to the highest price in at least 24 years after reporting an increase in third-quarter sales and raising its full-year target. Clariant (CLN) AG rose the most in six months after the maker of specialty chemicals said it plans to sell its leather-services business to Wendel SA’s Stahl.
The Swiss Market Index fell 0.1 percent to 8,228.37 at the close of trading in Zurich, as eleven stocks gained and seven dropped. The equity benchmark has rallied 2.6 percent so far in October as U.S. lawmakers agreed to raise the federal government’s debt limit and end a partial shutdown. The broader Swiss Performance Index was also little changed today.
“Investors expect that the Fed will continue to keep monetary policy very loose,” Michele Rimann, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland, said. “Experts believe that the Fed will only start tapering next year.”
The volume of shares changing hands in SMI-listed companies was 65 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.
The Federal Open Market Committee concludes a two-day meeting today. Policy makers will hold off paring the $85 billion of monthly bond purchases until their March 18-19 meeting, a Bloomberg survey showed. The central bank will announce its decision at 2 p.m. in Washington.
A report from the ADP Research Institute today showed that U.S. companies added 130,000 workers in October, the smallest gain since April. The median forecast of 39 economists surveyed by Bloomberg predicted an advance of 150,000. Businesses hired a revised 145,000 people in September.
Nestle fell 0.6 percent to 65.50 Swiss francs. A gauge of food and beverage companies posted the third-worst performance of the 19 industry groups in the Stoxx Europe 600 Index.
UBS retreated 1.4 percent to 17.45 francs. Switzerland’s largest lender yesterday slumped 7.7 percent after saying it probably won’t reach its profitability goal in 2015 as the Swiss regulator demanded it hold more capital for risks related to litigation.
Ascom Holding AG slipped 2.2 percent to 13.25 francs. The provider of mobile communications lowered its 2013 target for margins on earnings before interest, tax, depreciation and amortization to 14 percent to 15 percent, compared with a previous goal of 15 percent to 16 percent.
“Although Ascom remains inexpensive, we think investors will only give Ascom credit for improvements once they see them and once communication to investors become more reliable again,” Stefan Gaechter, an analyst at Helvea AG, wrote in a note to clients.
Sika (SIK) rallied 8.3 percent to 2,912 francs, its highest price since at least 1989 and the largest advance in more than four years. The world’s largest maker of construction chemicals said third-quarter sales grew 11 percent in local currencies to 1.4 billion francs, beating the 1.38 billion average estimate in a Bloomberg survey. The company also predicted 2013 revenue growth of as much as 7 percent in 2013, up from an earlier forecast for as much as 6 percent.
Clariant gained 4.5 percent to 15.83 Swiss francs. Under the proposed sale of its leather-services unit, the company will receive 85 million francs ($94.5 million) and a 23 percent stake in Stahl.
“The planned divestiture of the leather-service business marks the last bigger step in the reshaping of the business portfolio,” Peter Casanova, analyst at Bank J. Safra Sarasin AG, wrote in a note to clients.
Rieter Holding AG gained 2 percent to 187.70 francs after the maker of textile machinery said it will improve margins by cutting production costs and forecast low double-digit sales growth for the full year.
Gategroup Holding AG (GATE) increased 2.6 percent to 23.80 francs, a nine-month high, after the airline caterer said it won a five-year contract extension with EasyJet Plc, adding the contract is worth more than 800 million francs in revenue.
Cembra Money Bank AG jumped 14 percent to 57.90 francs on its first day of trading.
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