Rieter Holding AG (RIEN), a Swiss maker of textile machinery, rose the most in more than three weeks after UBS AG raised its recommendation on the stock, citing benefits of growth in Asia that may boost earnings starting in 2014.
Rieter jumped as much as 5.9 percent to 132.70 Swiss francs, the biggest intraday gain since June 6, and was trading up 3 percent at 11:48 a.m. in Zurich.
Investors haven’t been considering how Winterthur-based Rieter’s spending plans on information technology and development of mid-range textile machinery for Asian markets will help earnings, Andre Rudolf von Rohr, a Zurich-based analyst at UBS, said in a research report. Growth in Asia may generate 75 million francs ($77.6 million) to 150 million francs in extra sales, he said.
“It seems that the market has treated the 140 million- franc investments almost like costs without any potential upside,” wrote Rudolf von Rohr, who increased his recommendation to buy from neutral. UBS kept estimates for Rieter’s 2012 sales and earnings unchanged.
Competing Swiss textile machinery maker OC Oerlikon Corp AG (OERL) said April 30 that demand in China was stable after orders peaked at the end of 2010 and beginning of 2011.
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