Bloomberg News

Swiss Stocks Climb as Swiss Re, Credit Suisse Sell Assets

July 03, 2012

Swiss stocks advanced for a third day, extending a two-month high, as Swiss Re (SREN) Ltd. and Credit Suisse Group AG (CSGN) sold assets and a report showed factory orders increased in the U.S.

Swiss Re rose 1.7 percent after agreeing to sell Swiss Re Private Equity Partners AG to BlackRock Inc. Credit Suisse, the second-biggest Swiss lender, added 2.3 percent as the bank was said to sell a 7 percent stake in Aberdeen Asset Management Plc.

The Swiss Market Index (SMI) climbed 1.4 percent to 6,194.08 at the close in Zurich, the highest since April 20. The gauge has rallied 4.3 percent this year as the European Central Bank disbursed 1 trillion euros ($1.26 trillion) to euro-area financial companies and the region’s leaders opened the door to directly recapitalizing lenders using the European Stability Mechanism. The broader Swiss Performance Index also gained 1.4 percent today.

“Some investors have very strong expectations for the European central Bank and the Federal Reserve to issue more monetary measures and nobody wants to be short before the ECB meeting this week,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen, where he helps oversee $55 billion. “Macroeconomic data has not been bad enough to warrant more unconventional monetary stimulus just yet, but we’re very close to the point where more bad news will actually be good news for equity investors.”

Interest Rates

The ECB and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. Five predict a cut of 50 basis points and 11 foresee no change.

The People’s Bank of China may cut lenders’ reserve requirements to increase liquidity in the banking system, according to a commentary on the front page of today’s China Securities Journal, which is published by the official Xinhua News Agency. The central bank announced a cut to interest rates on June 7, a day after the newspaper published a commentary urging the move.

In the U.S., a Commerce Department report showed that orders to factories in the world’s largest economy increased 0.7 percent in May. That exceeded the median forecast of 52 economists in a Bloomberg survey for a 0.1 percent gain. The measure dropped for two consecutive months in March and April for the first time in more than three years.

The volume of shares changing hands in companies listed on the SMI was 16 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Swiss Re

Swiss Re, the world’s second-biggest reinsurer, rose 1.7 percent to 61.10 francs. BlackRock said it will buy Swiss Re’s $7.5 billion European private equity and infrastructure fund of funds unit for an undisclosed amount.

Swiss Life Holding AG (SLHN), Switzerland’s largest life insurer, advanced 3.3 percent to 93.05 francs, a two-month high.

Credit Suisse advanced 2.3 percent to 17.70 francs as two people with knowledge of the transaction said the bank was selling a 7 percent stake in Aberdeen Asset Management for as much as 205 million pounds ($322 million).

Adecco SA (ADEN), the biggest supplier of temporary workers, advanced 2.9 percent to 43.28 francs.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus