Bloomberg News

Swiss Stocks Gain for Fifth Day in Six as Swatch, Richemont Rise

September 20, 2011

Sept. 20 (Bloomberg) -- Swiss stocks rose for a fifth day in six as the nation’s watchmakers and insurers rallied.

Swatch Group AG and Cie. Financiere Richemont SA gained more than 2.5 percent. Zurich Financial Services AG, Switzerland’s largest insurer, jumped 3.7 percent. Holcim Ltd., the world’s second-biggest cement maker, added 1.3 percent after naming a new chief executive officer.

The Swiss Market Index of the largest and most actively traded companies climbed 1 percent to 5,415.48 at 4 p.m. in Zurich after earlier falling as much as 0.6 percent. The gauge has tumbled 19 percent from this year’s high on Feb. 18 as the Swiss franc’s strength curbed exports and concern mounted that the global economic recovery is stalling. The broader Swiss Performance Index added 0.9 percent today.

“We are seeing a technical rebound, but everything that’s happening on the markets in the current environment are short- term reactions,” said John Plassard, director at Louis Capital Markets in Geneva. “Any piece of good news, however small, will be there for the taking. Investors won’t be tricked -- the problems are not resolved.”

Greek Prime Minister George Papandreou’s government will hold another call with its main creditors this evening. Finance Minister Evangelos Venizelos held “productive and substantive” discussions with European union and International Monetary Fund officials yesterday about securing a sixth installment of rescue funds, the Greek finance ministry said.

Federal Reserve Meeting

Federal Reserve officials tomorrow will probably announce a program for monetary easing, with the Federal Open Market Committee deciding to replace short-term Treasuries in its $1.65 trillion portfolio with long-term bonds, according to 71 percent of 42 economists in a Bloomberg News survey.

The move, known as “Operation Twist” because it aims to bend the yield curve, will probably fail to reduce the 9.1 percent unemployment rate, 61 percent of the economists said.

“The possible Fed intervention tomorrow could be fruitless,” said Plassard. “While further easing is indeed expected, there probably won’t be a surprise, which could disappoint the financial markets.”

The Swiss franc weakened against the dollar and the euro today amid speculation the Swiss National Bank may tighten its target to limit the currency’s strength. Swiss central bank spokesman Walter Meier in Zurich declined to comment when asked about speculation that policy makers may adjust the franc ceiling against the euro.

Growth Forecast

The Swiss economy will grow at a slower pace this year and next than previously projected, the International Monetary Fund said. Gross domestic product may rise 2.1 percent this year and 1.4 percent in 2012, the Washington-based fund said in its World Economic Outlook published today. It previously forecast expansion of 2.4 percent and 1.8 percent, respectively. In 2010, GDP increased 2.7 percent.

Swatch, the world’s largest watchmaker, climbed 2.8 percent to 380.10 Swiss francs and Richemont, the owner of the Cartier brand, rose 3.4 percent to 48.48 francs. Swiss watch exports increased 16 percent in August, the Federal Customs Offices said today.

Zurich Financial jumped 3.7 percent to 173.10 francs, leading insurers higher. Baloise Holding AG rallied 2.7 percent to 64.75 francs, while Swiss Reinsurance Co. gained 1.5 percent to 39.78 francs.

Holcim Gains

Holcim added 1.3 percent to 46.04 francs. The company said Bernard Fontana from steelmaker Aperam will take over as chief executive officer when Markus Akermann retires after a decade in the post.

“The announcement of the new CEO is a surprise and as he is ‘tabula rasa’ he might bring some new ideas into the company,” Serge Rotzer, an analyst at Vontobel Holding AG, wrote in a note to clients today, using the Latin term for “blank slate.”

Basilea Pharmaceutica AG surged 12 percent to 35.50 francs, its biggest gain since February 2010, after Jefferies Group Inc. raised the drugmaker to “hold” from “underperform.”

ABB Ltd., the world’s biggest maker of power-transmission gear, climbed 1.4 percent to 16.14 francs. The company will work with Eskom Holdings SOC Ltd., South Africa’s state-owned electricity company, to build two solar photovoltaic power plants, Business Report said, citing ABB.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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