Minute by minute: Asian financial markets react cautiously after the purchase of Credit Suisse bank

The main stock indices of the Asian continent show slight variations in operations on Monday. It comes after the Federal Reserve, the European Central Bank, and other countries announced a coordinated action to calm the markets.


09:25 hsHOY

Asian stock markets with slight downward movements and are struggling to stabilize, although banks remain under pressure in the first half of Monday’s market session. It occurs after the acquisition of Credit Suisse by the Swiss bank UBS for 3,000 million Swiss francs (3,230 million dollars) has been formalized in the last few hours.

Japan’s Nikkei falls 0.4% and the Hang Seng falls 0.9%. meanwhile, European futures advanced 0.5% and S&P 500 futures rose 0.4% in an irregular operation. FTSE futures rose 0.3%.

MSCI’s broader index of Asia-Pacific stocks outside of Japan fell 0.6%.

The Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank announced that they will offer as many swap operations or currency exchanges as necessary to help foreign banks to gain access to US dollar funding for one week through April. And instead of being weekly, those operations will be daily.

The aim of this measure is to prevent markets from convulsing the reaction of nervous investors to the bankruptcies of Silicon Valley Bank and Signature Bank in the United States and the acquisition of Credit Suisse by UBS in Europe.

“Previously weekly, these operations will now be daily and will begin on Monday, March 20, 2023. They will continue at this rate at least until the end of April ,” the statement said.

UBS agreed to purchase Credit Suisse for USD 3,230 million (REUTERS)UBS agreed to purchase Credit Suisse for USD 3,230 million (REUTERS)

09:16 hsHOY

After a weekend of intense negotiations, it was confirmed this Sunday that UBS will acquire its rival Credit Suisse for 3,000 million Swiss francs.

The operation of the entities that are part of the thirty considered “systemic risk” for global banking was confirmed by the president of the Swiss Confederation, Alain Berset, who declared that it is the best way to ” restore confidence” and considered that this solution “is decisive for the stability of the entire global financial system.”

UBS will pay $3.23bn for Credit Suisse, whose market value was $8bn last Friday, but for which it had offered just $1bn. In addition, the Swiss government had to offer a guarantee of USD 9.750 million to UBS for possible “loss risks” in the Credit Suisse portfolio and the Swiss National Bank will make available, as another firewall line, a liquidity line of USD 100 billion more.

Time was playing against Credit Suisse and the pressure was increasing on its managers since the Swiss authorities considered it essential to have a sealed agreement before the opening of the markets on Monday, which begin to operate in Asia when it is still night in Europe.

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