BankinggiantCreditSuisselostnearlyafourthofitsvalueWednesday,amidthegrowingfalloutfromthecollapseoftworegionalbanksintheUnitedStates.
WednesdaymarkedthesecondtimeinthreetradingsessionssincethecollapseofCalifornia’sSiliconValleyBank(SVB),andthesubsequentfailureofSignatureBankfromNewYork,thatEuropeanfinancialstockswereseverelybattered.
Nevertheless,thedramaticimpactonCreditSuisseintradingWednesdaywaslargelyunexpected,sincetheinstitutionissolarge.
Accordingto2022datafromInsiderIntelligence,CreditSuissewasthesecond-largestbankinSwitzerlandandthe17th-largestinEurope,withanestimated730billioneuros(772billionU.S.dollars)inassetsundercontrol.Varanasi Investment
TheSwissinstitutionsawitssharepriceplummetby24percentintradingWednesday,endingthedayat1.7Swissfrancsinheavytrading.Earlierinthesessionthesharesweredownbymorethan30percent.Pune Investment
Wednesday’sfallwasthetenthconsecutivelosingsessionforthecompany’sshares.Theyhavelostnearly40percentoftheirvaluesinceMarch3,whensharestradedat2.78Swissfrancs.
ThelatestdevelopmentshavealsoincreasedvolatilityfortheSwissfranccomparedtotheeuro,theU.S.dollar,andotherleadingcurrencies.
StockexchangesacrossEuropewerealsoimpactedbyWednesday’slosses.Jaipur Investment
TheDAXblue-chipindexonGermany’sFrankfurtStockExchangefellby3.3percent;inParis,theCAC-40indexfellby3.6percent;sharesslipped4.6percentinMilan;inMadridtheyweredownby4.3percent;andinAmsterdamby2.9percent.New Delhi Stock Exchange
Inmostcases,financialsectorstocksledtheretreatasinvestorsworriedaboutfurtherimpactsonbankinginstitutions.
TheCreditSuissesell-offwasreportedlytriggeredbyaweaker-than-expectedannualfinancialstatement,followedbytheannouncementthataleadingshareholder–theSaudiNationalBank–wouldnotprovidenewfinancialsupportthroughtheacquisitionofmoreshares.
TheSwissNationalBanksaidlateWednesdaythatitwouldprovideCreditSuissewithcashifrequiredtokeepitafloat,althoughofficialssaidthebankwasnotatriskofcollapse.
Meanwhile,theEuropeanCentralBanktoldothermajorEuropeanlenderstomonitortheirexposuretoCreditSuissesharesofbonds.
Europeanbankshavebeenunderpressureoverthelast12months,withinflationratessoaringamidenergysupplyandtradeissuestiedtotheongoingconflictbetweenRussiaandUkraine.Risingpriceshavesqueezedprofitsbypushingbondyieldshigher.(1Swissfranc=1.07U.S.dollar)
Hyderabad Wealth Management