Swiss Stocks Advance to Almost Four-Week HighJonathan Morgan
Swiss stocks advanced to the highest in almost four weeks as the U.S. said it would postpone plans for a strike on Syria if the nation surrenders its chemical weapons and as Chinese industrial production and retail sales exceeded forecasts.
Credit Suisse Group AG added 2.7 percent after Chief Executive Officer Brady Dougan told the Financial Times that Switzerland’s second-biggest bank is aiming for lower though more sustainable returns. Swiss Life Holding AG gained 2.1 percent. Partners Group Holding AG tumbled the most since 2008 after the money manager reported results.
The Swiss Market Index rose 1.3 percent to 8,039.18 at the close of trading in Zurich, the highest since Aug. 14. The gauge has still lost 4.4 percent since May 22 as the Federal Reserve said it may pare bond purchases if the economy improves sustainably. The broader Swiss Performance Index also surged 1.3 percent today.
“We have a relief rally taking place in Europe,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “Fears of a U.S. attack on Syria are receding since a diplomatic resolution can be found.”
U.S. President Barack Obama said a Russian proposal to convince Syria to give up its chemical weapons is a “potentially positive development,” while expressing skepticism on whether President Bashar al-Assad’s government will follow through. Obama, who will address Americans on the matter tonight, said in an interview with NBC News he isn’t confident that he’ll get congressional approval for a military strike against Syria.
French Foreign Minister Laurent Fabius said he will submit the Russian-backed plan to the United Nations, as Interfax reported that Syria accepted the proposal.
China’s industrial output rose 10.4 percent in August from a year earlier and retail sales gained 13.4 percent, the National Bureau of Statistics said today. The advance in industrial production topped the median estimate for 9.9 percent growth in a Bloomberg survey. The retail-sales figure compared with a projection for 13.3 percent advance.
“The recent data out of China has been signaling a bit of a recovery,” Mark Harris, a London-based fund manager at City Financial, which oversees about $1.2 billion, said in a interview. “You’re beginning to see traction globally. This is an opportunity to buy cyclical stocks even though I do expect some sort of a contained pull-back this year and volatility may pick up.”
The volume of shares changing hands in SMI-listed companies was 23 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Credit Suisse advanced 2.7 percent to 28.68 Swiss francs, a two-week high. Dougan said Credit Suisse’s aim of an average 15 percent return on equity is a more reliable promise than its 20 percent to 30 percent target from before the financial crisis, according to the FT.
Swiss Life, Switzerland’s biggest life insurer, added 2.1 percent to 183.60 francs.
Partners Group tumbled 8.7 percent to 226.40 francs, the biggest drop since October 2008, after the money manager focused on private equity reported a decline in performance fees and weaker first-half revenue margin.
Performance fees slid 35 percent to 13 million francs ($13.9 million), depressing the firm’s margin on revenue to 127 basis points, from 137 basis points a year earlier, the Zug, Switzerland-based company said. A basis point is one hundredth of a percentage point.
Performance-related income was the “main miss,” and margins were lower than expected, Teresa Nielsen, an analyst at Vontobel Holding AG in Zurich, wrote in a note to clients.