Bloomberg News

Swiss Stocks Fall on China Cut; Credit Suisse Declines

March 05, 2012

Most Swiss (SMI) stocks fell as a cut in China’s growth target and a bigger than estimated drop in euro- area manufacturing and services overshadowed a report showing Swiss retail sales rose the fastest in seven months.

Syngenta AG and Transocean Ltd. (RIG) led declining shares. Nestle SA (NESN), which accounts for almost 25 percent of the benchmark index by weight, rose as the dollar gained against the Swiss franc. Novartis AG (NOVN) and Roche Holding AG (ROG), the second and third- heaviest shares on the index, respectively, also advanced.

The Swiss Market Index, a measure of the biggest and most actively traded companies, rose less than 0.1 percent to 6,153.91 at the close of trade in Zurich. Thirteen stocks fell and seven rose. The broader Swiss Performance Index lost less than 0.1 percent.

“A week ago, I became cautious,” said John Plassard, director at Louis Capital Markets SA in Geneva. “Even though the Greek problem is pretty much taken care of, it’s a never- ending story. The market has been seeing the glass half full. If that changes, the market can turn quickly.”

China reduced its growth target to 7.5 percent this year, the lowest goal since 2004, according to a transcript of Premier Wen Jiabao’s address to the National People’s Congress. The government will also aim for inflation of about 4 percent this year, unchanged from its goal in 2011.

A euro-area composite index based on a survey of purchasing managers in both industries dropped to 49.3 from 50.4 in January, London-based Markit Economics said today. That was below an initial figure of 49.7 published on Feb. 22. A reading below 50 means the measure contracted.

Greek Debt Swap

Gains may also be limited this week as investors wait to see how many of Greece’s private creditors approve the biggest sovereign-debt restructuring in history.

The success of the 106 billion-euro ($140 billion) debt swap, confirmed on the eve of last week’s European Union leaders summit in Brussels, depends on how many investors agree to the writedown by the March 8 deadline. Euro-area finance ministers will hold a teleconference on March 9 to review the deal’s outcome.

Swiss retail sales rose 4.4 percent in January from a year earlier, when adjusted for inflation, after gaining a revised 1.7 percent in the previous month, the Federal Statistics Office in Neuchatel, Switzerland, said in an e-mailed statement today. That’s the strongest increase since June.

Syngenta Slide

Syngenta, the world’s largest maker of agricultural chemicals, fell 1.6 percent to 295 francs. Credit Suisse Group AG (CSGN), Switzerland’s second-biggest bank, slipped 1.3 percent to 24.60 francs. Transocean, the world’s largest offshore-rig operator, declined 2.6 percent to 48.23 francs.

Nestle, the world’s biggest food company, added 0.3 percent to 55.70 francs as the Swiss currency fell against the dollar. Nestle generated 35 percent of its 2011 revenue in the Americas.

Novartis, which made 33 percent of its 2011 revenue in the U.S., added 0.9 percent to 49.79 francs. Roche climbed 1.3 percent to 159.40 francs. The U.S. accounted for 36 percent of Roche’s total sales in 2011.

OC Oerlikon Corp AG (OERL) jumped 9.3 percent to 7.86 francs. The company expects profitability and its dividend payment for 2011 to be a “ground level” from which it will improve, Chief Executive Officer Michael Buscher said.

Evolva Holding SA (EVE) soared 17 percent to 55 centimes. The biotech company said it will present its novel antibiotic EV-035 at a conference in London today. The drug “shows excellent broad spectrum activity,” it said.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

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


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