Saab Shares Jump as Swiss Lower House Approves GripenNiklas Magnusson and Catherine Bosley
Saab AB rose to its highest price in more than seven weeks in Stockholm trading after the Swiss parliament’s lower house voted in favor of buying 22 Gripen fighter planes from the Swedish defense company.
The shares climbed as much as 4.1 percent to 131.1 kronor, their highest intraday price since July 19 and steepest increase since Aug. 27. The stock advanced 2.1 percent to 128.6 kronor as of 12:49 p.m. local time, with trading volume at almost twice the daily average in the past three months.
The green light given by the lower house to release the funds needed for the acquisition of Gripen planes follows a vote in favor of the purchase by the upper house in March, though it then didn’t approve the funding for the project. The upper house will discuss the purchase again next week. Switzerland plans to spend about 3.1 billion Swiss francs ($3.3 billion) on Gripen planes to replace aging Northrop F-5 Tigers.
The purchase of the Swedish fighter jets is controversial because it will require spending to be cut in other areas, such as education. Switzerland’s Social Democrats and Greens have announced they’ll call a national referendum to prevent buying Gripen if parliament approves the purchase. Some 63 percent of Swiss people are opposed to a purchase, according to poll published by newspaper SonntagsBlick on Sept. 8.
“I’m convinced that in a referendum we’d have good chances,” Swiss Defense Minister Ueli Maurer said before parliament today. He termed the choice of the Gripen planes, rather than models made by Dassault Aviation SA and European Aeronautic, Defence & Space Co., as the “modest solution.”
Chantal Gallade, member of parliament for the Social Democrats, said that “Switzerland doesn’t need new jets” and that “Gripen is a high-risk project,” adding her party will call a referendum as “it’s important that the people decide.”
Some 113 members of the Swiss lower house voted in favor of the purchase while 68 opposed it and six abstained their votes. The vote on the funding for the project was won with 114 votes against 70, with four members abstaining their votes.