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(Corrects to remove reference to reason for purchase in first paragraph)
(Bloomberg) -- Nestle SA spent a record 87.5 million francs ($100 million) on the day the Swiss National Bank eradicated a cap on the currency.
The food company kept the pace up for five trading sessions, buying a near-record level of 1.3 million shares daily, about four times the average amount, according to data compiled by Bloomberg. Yesterday, Nestle slowed its rate of repurchases by about half, and so far today it’s bought about the daily average amount.
The five-day buying spree cushioned the stock decline during that period to 11 percent, less than the 13 percent drop in the benchmark SMI Index. The Swiss stock index is the worst performer among Europe’s major benchmarks this year as the franc’s 22 percent surge against the euro since 2014 is weighing on the profit outlook of the country’s exporters.
Nestle is allowed to buy a maximum of 1.3 million shares on a single day under its current buyback plan, according to Swiss regulations.
“Selling pressure has eased in the last day or so after the initial onslaught after the SNB’s decision,” said Jon Cox, an analyst at Kepler Cheuvreux. “By easing off, it’s probably signaling it is comfortable with the stock price.”
The stock traded 2.6 percent higher at 68.05 francs as of 2:33 p.m. in Zurich.
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