Bloomberg News

Switzerland Stocks Advance; Roche, Nestle Gain, Swatch Declines

February 07, 2012

Feb. 7 (Bloomberg) -- Stocks in Switzerland advanced, after the benchmark Swiss Market Index swung between gains and losses at least 12 times, as UBS AG and Swatch Group AG reported earnings that missed analysts’ estimates.

Roche Holding AG and Nestle SA, which together account for more than 38 percent weight in the SMI, led the gains. UBS, the country’s largest lender, fell after posting a 76 percent drop in fourth-quarter profit. Swatch lost 4 percent.

The SMI, a measure of the biggest and most actively traded companies, added 0.2 percent to 6,157.59 in Zurich, after dropping as much as 0.5 percent. The benchmark gauge has advanced 3.7 percent this year amid optimism policy makers will contain the euro-area debt crisis. The broader Swiss Performance Index also increased 0.2 percent today.

“We’re at a neutral position in our portfolios,” said Christophe Donay, head of asset allocation at Pictet & Cie. in Geneva. “Stocks’ gains are coming to an end. We’re in a waiting period.”

Greece’s government and international creditors are working on the final draft of an agreement on budget and structural measures needed to get a second aid package, a Greek official said.

The document is being drafted at a meeting between Finance Minister Evangelos Venizelos and representatives of Greece’s creditors and will be discussed by political leaders later in the day, the government official told reporters in Athens today on customary condition of anonymity.

‘Narrow Range’

“The markets are nervous, though the moves are in a very narrow range,” said Thomas J. Caduff, chief executive officer at ICN Trust Finance AG in Zurich. “It is generally expected that a solution will be found in the debt talks. But first the markets need at least the reassurance that those talks are coming to an end for more rapid action.”

UBS slid 1.4 percent to 13.02 Swiss francs. The lender said fourth-quarter profit fell 76 percent after its investment bank reported a second-consecutive quarterly loss. Net income dropped to 393 million francs ($427 million) from 1.66 billion francs a year earlier. That missed the 721 million-franc average estimate of eight analysts in a Bloomberg survey.

Swatch retreated 4 percent to 398.30 francs as the biggest maker of Swiss watches reported an operating profit of 1.61 billion francs for 2011. Analysts expected 1.67 billion francs, according to the average of 11 estimates compiled by Bloomberg.

Cie. Financiere Richemont SA, the world’s second-largest maker of luxury goods, dropped 2.5 percent to 53.90 francs.

ABB, Meyer Burger

ABB Ltd., the world’s biggest maker of power-transmission equipment, fell 1.3 percent to 19.70 francs.

Meyer Burger Technology Ltd. retreated 4 percent to 18.1 francs. Europe’s largest maker of solar-panel manufacturing equipment said consolidation from the results of its Roth & Rau AG subsidiary on an earnings before interest and tax level will have “a negative effect” of about 110 million francs.

Roche advanced 1.9 percent to 161 francs after Goldman Sachs Group Inc. reiterated its “conviction list buy” stance on the stock, saying the drugmaker is one of the “best- positioned” health-care companies.

Nestle, the world’s biggest food company, rose 0.9 percent to 53.55 francs. Givaudan SA, the largest maker of flavors and fragrances, climbed 1.2 percent to 888 francs.

--With assistance from Corinne Gretler in Zurich. Editors: Srinivasan Sivabalan, Andrew Rummer

To contact the reporters on this story: Adria Cimino in Paris at acimino1@bloomberg.net; Alexis Xydias in London at axydias@bloomberg.net

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


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