Bloomberg News

Swiss Stocks Rise to Highest Since July After U.S. Factory Data

January 04, 2012

Jan. 3 (Bloomberg) -- Swiss stocks rose to their highest level since July after a U.S. report showed that manufacturing in the world’s largest economy expanded in December at the fastest pace in six months.

Health-care companies led gains, with Roche Holding AG climbing 1.7 percent. Adecco SA jumped 5 percent after agreeing to buy Japan’s VSN Inc., a staffing-services company. UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, added at least 3.1 percent.

The Swiss Market Index, a measure of the biggest and most actively traded companies, advanced 1.9 percent to 6,050.93 at the close in Zurich, the highest level since July 11. The market was closed yesterday for a holiday. The gauge dropped 7.8 percent in 2011, led by banks, as UBS retreated 27 percent and Credit Suisse plunged 41 percent. The broader Swiss Performance Index gained 2 percent today.

“The U.S. economy has the potential to surprise positively if one considers that the markets have already priced in a lot of the negative,” said Stefan Angele, head of investment management at Swiss & Global Asset Management Ltd. in Zurich. “However, I assume it’s still too early for euphoria. The unsolved problems of the European debt crisis and the resulting uncertainties in the financial system will likely weigh upon the market.”

U.S. Economy

European stocks climbed in the last week of 2011 as reports showed the recovery in the U.S. is gathering pace and as optimism grew that policy makers will contain the debt crisis. The second straight week of gains helped trim the benchmark Stoxx Europe 600 Index’s loss last year to 11 percent.

In the U.S., a report today showed that manufacturing in the largest economy expanded last month at the fastest pace since June.

The Institute for Supply Management’s factory index rose to 53.9 last month from 52.7 in November. The median projection of 63 economists surveyed by Bloomberg News called for an increase to 53.5. Fifty is the dividing line between growth and contraction. Construction spending increased 1.2 percent in November, beating estimates in a Bloomberg News survey.

Swiss manufacturing output unexpectedly expanded in December, suggesting the economy is weathering cooling export demand. The Procure.ch Purchasing Managers’ Index rose to 50.7 from 44.8 in November when adjusted for seasonal swings, Credit Suisse said today. That’s the first reading above 50, indicating expansion, since August. Economists forecast a gain to 45.4 in a Bloomberg News survey.

Fiscal Rulebook

European leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Jan. 9 to work out the details.

Roche, the world’s biggest maker of cancer drugs, rose 1.7 percent to 161.90 Swiss francs and Novartis AG added 1.3 percent to 54.40 francs. The two companies, which make up about 35 percent of the SMI, were among the stocks that contributed the most to its increase today. Actelion Ltd., Switzerland’s largest biotechnology company, gained 4.7 percent to 33.76 francs.

Adecco, the world’s biggest supplier of temporary workers, rallied 5 percent to 41.30 francs after saying it agreed to buy VSN at an enterprise value of 90 million euros ($118 million).

UBS and Credit Suisse advanced 3.1 percent to 11.53 francs and 3.5 percent to 22.85 francs, respectively.

Swatch Group AG, the world’s biggest watchmaker, increased 3.6 percent to 364.10 francs. Cie. Financiere Richemont SA, owner of the Cartier brand, gained 4.5 percent to 49.66 francs.

--Editors: Randall Hackley, Srinivasan Sivabalan

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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