Bloomberg News

Swiss Stocks Advance to Three-Month High on Debt-Crisis Progress

October 24, 2011

Oct. 24 (Bloomberg) -- Swiss stocks climbed to the highest level since July amid speculation euro-area leaders are moving toward agreeing on a strategy to help stem the debt crisis.

Nobel Biocare AG surged the most in nine years after NZZ am Sonntag said two buyout firms are looking at the world’s second- biggest maker of dental implants. Swatch Group AG, the largest watchmaker, rose 4.8 percent after a report that sales this year will exceed 7 billion Swiss francs ($7.9 billion).

The Swiss Market Index, a measure of the biggest and most actively traded companies, advanced 0.6 percent to 5,788.63 at the close in Zurich, the highest since July 28. The gauge has rallied 21 percent from this year’s low on Aug. 10, entering a bull market. The broader Swiss Performance Index increased 0.8 percent today.

The European debt crisis “continues to be suspenseful,” said Manfred Hofer, senior investment analyst at LGT Capital Management AG in Pfaeffikon, Switzerland. “Hopefully the points that have not yet been agreed on will be wrapped up at the next summit on Wednesday. Anything else would be a disappointment for the markets.”

Leaders at yesterday’s crisis-management summit in Brussels ruled out tapping the European Central Bank’s balance sheet to boost the region’s rescue fund and outlined plans to aid banks. They also looked at strengthening the International Monetary Fund’s role, though excluded a forced restructuring of Greek debt.

The complete blueprint for the rescue fund won’t come together until a summit in two days. Like yesterday, it will start with all 27 European Union leaders before the 17 heads of euro economies gather on their own.

‘Options Are Converging’

“Work is going well on the banks, and on the fund and the possibilities of using the fund, the options are converging,” French President Nicolas Sarkozy told reporters at the Brussels summit yesterday. “On the question of Greece, things are moving along. We’re not there yet.”

Nobel Biocare soared 14 percent to 11.38 francs, the biggest jump since October 2002, after NZZ am Sonntag said EQT Partners AB and Bain Capital LLC are considering buying the company, citing two unidentified sources.

EQT, a Stockholm-based private equity company, has been looking at Nobel Biocare as a takeover target “for some time,” NZZ reported. Bain, a U.S. buyout-fund manager, has been trying to decide for “several months” whether Nobel is a “buy” or the shares will fall further, according to the newspaper report.

‘No Contact’

“So far we have had no contact and are in no discussions with anyone,” Nicolas Weidmann, a spokesman for Nobel Biocare, told Bloomberg News by phone yesterday.

Swatch rallied 4.8 percent to 373.50 francs, its highest price in a month. NZZ am Sonntag reported the company’s sales this year will “clearly exceed” 7 billion francs, while growth adjusted for currency swings may reach 9 percent to 11 percent in 2012. The Swiss newspaper cited Chief Executive Officer Nick Hayek.

September was Swatch’s strongest-ever month, and the company has never had such a large order backlog, Hayek said, according to the report published yesterday.

UBS AG added 1.4 percent to 11.14 francs. Switzerland’s largest bank plans to cut its return-on-equity target to between 10 percent and 15 percent, SonntagsZeitung reported, citing an unidentified manager at the bank. That’s 5 percentage points lower than targeted under former Chief Executive Officer Oswald Gruebel, the newspaper said.

Actelion, ABB

Actelion Ltd., Switzerland’s largest biotechnology company, gained 2.2 percent to 31.92 francs. A U.S. court granted Actelion’s motion for a new trial on the level of compensation granted to Asahi Kasei Pharma Corp. over development of the lung drug fasudil, unless the Tokyo-based company consents to a reduction in damages.

ABB Ltd., the world’s biggest power-grid supplier, advanced 3 percent to 17.35 francs, the most in two weeks, after Statoil ASA awarded the company a 1.6 billion-krone ($288 million) contract.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Corinne Gretler in Zurich at

To contact the editor responsible for this story: Andrew Rummer at

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