Bloomberg News

Swiss Stocks Advance the Most Since Feb. 1; Banks Rally

May 22, 2012

Swiss stocks rallied the most in more than three months amid speculation euro-area leaders will act to support the currency union and as a U.S. report showed sales of existing homes rose for the first time in three months.

Transocean Ltd., the world’s largest offshore-rig contractor, gained 2.8 percent. Credit Suisse Group AG, Switzerland’s second-biggest lender, climbed the most in two months. Sonova Holding AG (SOON) slumped the most in more than a year after forecasts for sales and profit growth missed analysts’ projections.

The Swiss Market Index (SMI) rose 1.6 percent to 5,910.20 at the close in Zurich, trimming this year’s decline to 0.4 percent. This was SMI’s biggest jump since Feb. 1. The gauge dropped 2.6 percent last week as Greece’s politicians failed to form a government and the country’s president called a second election for June 17. The Swiss Performance Index also advanced 1.6 percent today.

“We’re seeing a normal rebound after a selloff,” said Nils Rosendahl, an analyst at Nordea Markets in Stockholm. “Everyone is seeing this as breathing space before the new elections in Greece.”

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

Germany will consider all ideas on bolstering euro-area growth, Finance Minister Wolfgang Schaeuble said as he met with Pierre Moscovici, his French counterpart yesterday. Moscovici said French President Francois Hollande backs the issue of joint euro-area bonds that will help debt-ridden nations reduce their borrowing costs.

OECD Forecasts

The Organization for Economic Cooperation and Development said the debt crisis may spiral, damaging the world economy.

“The risk is increasing of a vicious circle, involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth,” OECD Chief Economist Pier Carlo Padoan wrote in the organization’s semi- annual report on the global economy.

In the U.S., sales of existing homes rose 3.4 percent to a 4.62 million annual rate in April, figures from the National Association of Realtors showed. The median forecast of economists surveyed by Bloomberg called for an increase to a 4.61 million rate.

Transocean jumped 2.8 percent to 41.37 Swiss francs, the largest increase in seven weeks.

Banks Rally

Credit Suisse (CSGN) added 3.9 percent to 19.47 francs. The bank said its investors chose to receive 48 percent of their 2011 dividend payments in shares instead of cash. The company will issue 24.2 million new shares, representing 1.9 percent of its current share capital.

UBS AG (UBSN) climbed 3.2 percent to 11.16 francs.

Sonova plunged 9.9 percent to 84.10 francs, the biggest drop since March 2011. The hearing-aid maker said sales will probably rise 7 percent to 9 percent and earnings before interest, taxes and amortization may gain 15 percent to 20 percent this year, excluding currency swings.

“Guidance looks on the weak side,” Ingeborg Oie, an analyst at Jefferies Group Inc., wrote in a report, adding that the consensus was for profit growth of 27 percent.

Georg Fischer AG (FI/N), Europe’s largest maker of iron castings for cars, climbed 4.4 percent to 352.50 francs, the biggest gain since February. The company said it bought Independent Pipe Products Inc., which has an annual revenue of more than $50 million, to expand its U.S. water pipe business. The company didn’t disclose any financial terms.

AFG Arbonia-Forster Holding AG (AFGN), the maker of heaters, windows, doors and refrigeration systems, advanced 4.6 percent to 17.10 francs, the steepest climb since March 26, after Martin Huesler, an analyst at Zuercher Kantonalbank AG in Zurich, raised the stock to overweight, the equivalent of buy, from market weight.

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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