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Big Swiss Stocks for Your Portfolio

CNBC.com
Wednesday, 4 Jun 2008 | 11:13 AM ET

Switzerland’s leading stock index, the SMI, has fallen more than 21 percent over the last twelve months, but investment opportunities are emerging with certain large-cap well-positioned stocks such as Roche and Swatch, Maximilian Muench, head of Swiss equities research at UBS told CNBC.

Stock Picking in Switzerland
Maximilian Muench from UBS Wealth Management Research is recommending his clients buy shares of pharmaceutical company Roche, luxury brands Swatch and Richemont, food group Nestle and technology group ABB.

"We believe Roche is the best positioned pharma company in the sector, it has a very strong pipeline," Muench told "Squawk Box Europe."

The company has lost almost 40 percent of its value versus its peers over recent weeks on concerns that competitor products might take its oncology franchise, but Muench does not believe the franchise is at risk, adding "it’s a good time for long-term investors."

The beaten-down Swiss luxury goods companies also have potential, according to Muench, despite concerns slowing economic growth and weakening consumer confidence will hit sales.

Muench recommended Swatch and Richemont as the companies are "gaining most of (their) growth from emerging markets such as Russia and China,” and have limited exposure to the slowing U.S. consumer.

Exposure to emerging markets also makes Swiss food group Nestlé and industrial group ABB a buy, Muench said.

Investors should still be cautious on financial stocks, according to Muench, and stick with defensive companies where there is good visibility on earnings growth.

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