Swiss Stocks Decline as Swatch Drop Offsets U.S. PayrollsJonathan Morgan
Swiss stocks fell from their highest level in more than 4 1/2 years, as Swatch Group AG’s decline outweighed better-than-expected U.S. private payrolls data.
Swatch fell the most in four weeks after Chief Executive Officer Nick Hayek downplayed expectations over industry growth prospects. Holcim Ltd. climbed to its highest price since 2010. Burkhalter Holding AG jumped to its highest since at least 2008 as Chief Executive Officer Marco Syfrig said in an interview that earnings will increase this year.
The Swiss Market Index slipped 0.3 percent to 7,698.72 at the close of trading in Zurich. The gauge has still gained 13 percent so far this year as U.S. lawmakers agreed on a budget avoiding automatic fiscal changes that had threatened to push the world’s biggest economy into a recession. The broader Swiss Performance Index also lost 0.3 percent today.
“The index is consolidating after Swatch Group’s CEO reined in expectations on future growth in the watch market, and after the SMI’s 13 percent gain, any negative news can be an excuse to book profits,” said Ion Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote in a message.
U.S. stocks rallied yesterday, sending the Dow Jones Industrial Average up by 126 points to close at an all-time high. The volume of shares changing hands in companies on the SMI was 10 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
In the U.S., companies added 198,000 workers in February, according to a private report based on payrolls. The increase in employment followed a revised 215,000 gain the prior month, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 41 economists surveyed by Bloomberg called for an advance of 170,000.
Orders to U.S. factories fell in January, weighed down by a slump in demand for military hardware and commercial aircraft.
Bookings dropped 2 percent after a revised 1.3 percent increase in December, figures from the Commerce Department showed today in Washington. Economists projected a 2.2 percent decline, according to the median forecast in a Bloomberg survey.
Swatch, the biggest maker of Swiss timepieces, fell 2.2 percent to 532.5 Swiss francs, its largest drop since Feb. 7. “The industry has seen very strong growth” of 15 percent to 30 percent in recent years, Hayek said at a press conference held at the Grenchen, Switzerland factory of Swatch’s ETA watch-component unit. “It would be formidable for the Swiss watch industry to grow 5 percent to 10 percent this year and it’s possible. So we need to calm the spirits” on expectations.
Panalpina Welttransport Holding AG fell 6.5 percent to 92 francs, its biggest drop since August 2011. The freight-forwarding company said conditions will be difficult after disappointing results last year, when it didn’t address costs fast enough.
“The market environment will remain difficult and volatile and we are therefore very cautious regarding forecasts for 2013,” Chief Executive Officer Monika Ribar said in a statement.
Holcim, the world’s largest cement-maker, climbed 1.5 percent to 76.60 francs, its highest price since June 2010.
Burkhalter advanced 2.8 percent to 361 francs, its highest price since at least June 2008. Syfrig said in an interview on financial-news website Cash that the company’s earnings per share will rise this year, providing levels of construction and immigration in the country remain buoyant and interest rates stay low.
Evolva Holding SA, a developer of ingredients for health-care products, surged 15 percent to 1.01 francs after agreeing to develop and market sweeteners with Cargill Inc.
Cargill will buy a 5 million-franc ($5.3 million) stake in Evolva, which will be eligible for as much as $7.5 million in milestone payments, the Reinach-based company said in a statement today. Evolva has the right to 45 percent of the final business, or royalties from sales of the products developed.