European stock exchanges as nervous as ever. The rescue plan for Credit Suisse by its rival UBS was not well digested by the markets, which opened the week with a marked drop, only to recover (only partially) the losses. What remains is the crash on the Zurich Stock Exchange for Ubs after the announcement of the acquisition of Credit Suisse. The stock opened down 13%. Credit Suisse itself also did badly, immediately sinking by 63% after the bailout agreement and then regaining its share slightly. Thus, a clear downward start for the European stock exchanges, still under pressure due to concerns for the banking sector, after the crashes of Svb and Signature Bank in the USA and the difficulties of Credit Suisse, which on Sunday seem to have found a solution, with the agreement from 3 billion with rivals Ubs. The markets, however, did not benefit from the reassurances of the central banks and opened the new week with generalized declines (here the variations of the price lists in real time). And the news that today, Monday 20 March, the Chinese president, Xi Jiping, will meet in Moscow with the Russian president, Vladimir Putin, to analyze a possible peace plan for Ukraine, also fades into the background.
The opening in Europe
European stock markets are under pressure again, therefore, despite the announcement of the rescue of Credit Suisse and despite the fact that the main central banks of the world took the field during the night to ensure liquidity to the system. Investors are worried that after the Swiss bank, other institutions may be in trouble, finding themselves dealing with an imbalance between assets and deposits.
After a sharply bearish opening, the European stock exchanges nevertheless reduced their losses with Milan, Frankfurt, London and Paris limiting losses to below one percentage point, while investors try to digest the consequences of the operation involving UBS and wonder about the possibility of new banking crises on both sides of the Atlantic. (here the variations of the price lists in real time). In Milan, the actions of the banks will be in the spotlight. Among these, the Mps could record particular variations, given that today they enter the Ftse Mib index in place of Buzzi. Also to follow Eni and St, who detach the coupon.
Credit Suisse in the arms of UBS
The weekend announcements on the banking crisis front seem to have had little effect: on Sunday the merger between Credit Suisse and Ubs was launched. At the end of a busy weekend it was announced that UBS will acquire Credit Suisse for 3 billion Swiss francs, with shareholders receiving one UBS share for every 22.48 shares of Credit Suisse, therefore valued at 0.76 francs. The group will obtain guarantees from the government for 9 billion and liquidity from the SNB (Swiss central bank) up to 100 billion. The operation is expected to lead to an 8 billion dollar cost reduction by 2027. Investors, however, point the finger to the elimination of Credit Suisse’s Tier 1 debt, worth about 16 billion Swiss francs. The operation was decided by the Swiss regulator, aiming to strengthen the institute’s capital, but is strongly criticized by investors, also given that the bonds in the hands of savers are wiped out, while the shares in the hands of Saudi and Qatari shareholders they stay.
The announcement of the central banks
The Swiss National Bank, the European Central Bank, the Central Banks of Canada, England and Japan have also jointly announced that to improve the effectiveness of dollar swap lines they are increasing the frequency of these operations from weekly to daily starting from Monday 20 March until the end of April.
Meanwhile, expectations are also rising for the decisions that the Federal Reserve will announce on Wednesday on interest rates, even if after the bankruptcy of Svb and Signature Bank, experts are convinced that the institute will increase the cost of money by 25 points basis.
Stock Exchanges in Asia: Tokyo in red
The index Hang Seng of the Hong Kong Stock Exchange it closed with a loss of 2.65%, conditioned by investors’ fears about the growing uncertainty in the banking sector. The index fell 517.88 points to 19,000.71, while the Hang Seng China Enterprises Index, which measures the performance of mainland Chinese companies listed on the Hong Kong Stock Exchange, lost 2.21%. Among the sub-indexes, the hardest hit was once again that of financial stocks, which lost 3.22%. The Stock Exchange Shanghai closed with a loss of 0.48% to finish at 3,234.91 points. The index of Shenzhen it lost 0.27% to end the session at 11,247.13 points. There Tokyo Stock Exchange he closed with his index finger Nikkei 225 to -1.42% to 26,945.67, while the Topix index lost 1.54%, or 30.12 points, to 1,929.30. (here the variations of the price lists in real time).
Euros, gold and oil
On the currency market, the euro is worth 1.0663 dollars (Friday’s closing 1.065) and 139.58 (139.54), while the dollar/yen stands at 130.88 (132.13). Oil is in sharp decline: wti, due in April, falls by 2.97% to 64.76 dollars a barrel, while Brent from the North Sea slips to 70 dollars a barrel. Gas, in Amsterdam, yields 6%, reaching exactly 40 euros. Finally, the value of gold continues to rise: it is traded at 1,987,675 dollars an ounce.