Bloomberg News

Switzerland Stocks Advance; UBS, Swisscom Shares Rally

May 02, 2012

Swiss stocks increased, snapping three days of losses, as UBS AG and Swisscom AG (SCMN) rallied after first- quarter earnings exceeded analyst estimates and U.S. manufacturing expanded.

UBS, Switzerland’s largest bank, jumped 3.7 percent. Swisscom AG, the nation’s biggest phone company, climbed the most in more than three years as profit fell less than expected. Clariant AG (CLN), the world’s largest maker of printing-ink chemicals, advanced 1.5 percent to as Vontobel Holding AG recommended the stock.

The Swiss Market Index (SMI) increased 0.2 percent to 6,108.77 at the close in Zurich, after earlier advancing as much as 1.2 percent. The measure fell 2.2 percent in April, the largest decline since August, amid disappointing economic reports and renewed concern the euro area’s debt crisis may deepen. The Swiss Performance Index also added 0.2 percent today.

“The good U.S. numbers gave the market a major boost at the start of the day,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Rather weak data from Germany, Italy and Switzerland have damped the euphoria a little. In addition, one must note that fresh money often flows into the markets at the beginning of the month.”

The Swiss Exchange was closed yesterday when the Institute for Supply Management said its U.S. factory index climbed to 54.8 last month, the best reading since June. Readings greater than 50 signal growth.

European Manufacturing

Euro-area manufacturing shrank for a ninth month in April. A factory gauge based on a survey of purchasing managers slipped to 45.9, London-based Markit Economics said today. That’s the lowest in 34 months and compares with an estimate of 46 published on April 23.

Individual measures for Switzerland, Italy and Germany also trailed behind economists forecasts.

Stocks pared their gains after data from ADP Employer Services showed companies in the U.S. added 119,000 workers in April after a revised 201,000 gain the previous month. That was less than the 170,000 called for in a Bloomberg News survey of 37 economists.

UBS (UBSN) gained 3.7 percent to 11.75 Swiss francs, the most in two weeks. Net income declined to 827 million francs ($910 million). That compares with the 810.9 million-franc average estimate of nine analysts surveyed by Bloomberg. The bank also attracted more funds from wealthy clients than analysts estimated.

Credit Suisse Group AG (CSGN), Switzerland’s second-largest bank, declined 2.1 percent to 21.25 francs.

Swisscom Surges

Swisscom climbed 4.4 percent to 352.90 francs, the biggest jump since January 2009. Net income declined to 453 million francs, while revenue fell 2.1 percent to 2.8 billion francs. Analysts surveyed by Bloomberg had estimated profit of 437.6 million francs and revenue of 2.79 billion francs.

Clariant rose 1.5 percent to 11.71 francs as Patrick Rafaisz, an analyst at Vontobel, upgraded the stock to buy from hold and upgraded his price estimate for the company’s shares by 27 percent to 19 francs.

Actelion Ltd. (ATLN), Switzerland’s biggest biotechnology company, advanced 3.1 percent to 39.60 francs, its highest price since July. UBS analysts Guillaume van Renterghem and Martin Wales added the stock to their most-preferred list, saying the long- term future of the company is now “secure” and it could attract a new set of potential investors.

Cie. Financiere Richemont SA, the owner of the Cartier brand, increased 1.3 percent to 56.85 francs. Baume & Mercier, one of its watchmaking units, said its sales are showing “very strong growth,” Le Temps reported, citing an interview with Alain Zimmermann, Baume & Mercier’s chief executive officer.

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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