Bloomberg News

Swiss Stocks Advance to Nine-Month High; Banks Lead Gains

March 13, 2012

Swiss stocks rose for a fifth day, the Swiss Market Index’s longest winning streak since January, after the euro area’s finance ministers approved a second bailout for Greece. Credit Suisse Group AG and UBS AG led bank shares higher. Photographer: Gianluca Colla/Bloomberg

Swiss stocks rose for a fifth day, the Swiss Market Index’s longest winning streak since January, after the euro area’s finance ministers approved a second bailout for Greece. Credit Suisse Group AG and UBS AG led bank shares higher. Photographer: Gianluca Colla/Bloomberg

Swiss stocks rose to a nine-month high after the euro area’s finance ministers approved a second bailout for Greece and German investor confidence climbed more than forecast.

Credit Suisse Group AG (CSGN) and UBS AG (UBSN), Switzerland’s largest lenders, jumped more than 2.5 percent as bank shares rallied. ABB Ltd. (ABBN), the world’s biggest maker of power-transmission gear, gained 1.7 percent after it won an order from Rio Tinto Group. Galenica AG (GALN) advanced after full-year net income beat estimates.

The Swiss Market Index (SMI), a measure of Switzerland’s biggest and most actively traded companies, added 1.1 percent to 6,260.02 at the close in Zurich, the highest since June 9. The gauge has gained 5.5 percent this year after the European Central Bank disbursed loans to the region’s banks and U.S. economic reports beat estimates. The broader Swiss Performance Index also climbed 1.1 percent today.

“Today the market focuses on the green light for Greece’s aid package,” said John Plassard, director at Louis Capital Markets SA in Geneva. “For the short term, it means the Greek problem is behind us and that investors can now focus on the real economy.”

The euro area’s finance ministers cleared a second rescue of Greece, enabling the first payment from the 130 billion-euro package ($170 billion) to be made later this month. Officials will give their formal approval on March 14, a day before the board of the International Monetary Fund votes on whether to contribute.

Greek Aid

The agreement concludes months of negotiations between Greece, the IMF and euro-area authorities over the successor to the 2010 bailout that failed to halt the debt crisis. Greece had to agree to deep budget cuts and complete the world’s largest- ever sovereign-debt restructuring to obtain the aid.

The ZEW Center for European Economic Research in Mannheim released a report that showed German investor confidence rose more than forecast in March. Its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 22.3 from 5.4 in February. Economists had forecast a gain to 10 in a Bloomberg survey.

A U.S. Commerce Department report showed that retail sales in the world’s largest economy rose in February by the most in five months. That matched the median forecast of 81 economists surveyed by Bloomberg News.

‘Robust Development’

“The numbers indicate a robust development of private consumption and deliver a friendly indication for U.S. growth in the first quarter of 2012,” Ulrich Wortberg, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in e- mailed comments.

The U.S. Federal Reserve will announce its interest-rate decision at 2:15 p.m. in Washington. Policy makers will probably refrain from further action to boost economic growth as they assess recent data, according to a March 9-12 poll.

The volume of shares changing hands in SMI-listed companies was 5 percent less than the average over the past 30 days, according to data compiled by Bloomberg.

Credit Suisse and UBS advanced 4.3 percent to 25.05 Swiss francs and 2.8 percent to 12.77 francs, respectively. Julius Baer Group Ltd. (BAER) added 2.2 percent to 36.57 francs. Bank shares posted the largest increase of the 19 industry groups in the Stoxx Europe 600 Index (SXXP), advancing 3.3 percent.

ABB climbed 1.7 percent to 18.95 francs after the company said it won an order from Rio Tinto for $100 million to increase the mining company’s production.

Galenica, a Swiss drug wholesaler, increased 2 percent to 574 francs, a two-month high. The company reported full-year profit of 255.6 million francs ($277 million), beating the average analyst estimate for net income of 211.6 million francs. Galenica also said it plans a dividend of 9 francs.

Holcim Ltd. (HOLN), the world’s second-biggest cement maker, climbed 3.7 percent to 62.50 francs, following a gauge of European construction companies higher. That’s the stock’s highest price since July.

To contact the reporters on this story: Tom Stoukas in Athens at astoukas@bloomberg.net; 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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