"It is not a bailout, but a commercial operation," protests the Swiss finance minister. But nobody believes it: the purchase of Crédit Suisse by UBS's rivals after a dramatic negotiation over the weekend was dictated by the need to prevent the crisis of the Zurich institution from causing a devastating Lehman Brothers bis. Was the objective achieved? Yes, but with some reservations.
HSBC down 5%, subordinated bonds suffer
The confirmation comes this morning from the Hong Kong Stock Exchange -2,5%, dragged down by the losses of HSBC -5%, another giant of systemic importance penalized by the solution chosen by the Swiss authorities.
- Let's take a closer look at the Swiss operation. The Crédit Suisse switches to UBS for 3 billion francs, three times as much as the first offer rejected with indignation on Friday evening, but only a third of the price quoted before the weekend. It is easy to say that UBS has spelled out an excellent deal also for public guarantees and the liquidity guaranteed by the Bern authorities. But, a surprise, the agreement provides that the value of subordinated bonds (16 billion francs) to be zeroed before that of the shares.
Bern protects Gulf shareholders
- The decision of Switzerland, a bank vault in a crisis of credibility, can be explained by the desire to avoid the flight from the country of the two most important partners, the Saudi Bank and Qatar Fund. But the news puts at serious risk confidence in the market (275 billion dollars) of At 1 bonds, until yesterday considered "almost shares", one step safer than shares. Goldman Sachs has anticipated that it will support the lawsuits of the Swiss bank's bondholders.
- The negative reaction on HSBC should thus be repeated at the European opening, especially against Deutsche Bank and some French banks. But the uncertainty could involve the entire sector, including the less exposed Italian banks.
The First National case is still open
The other hotbed of banking crisis, i.e. the front of medium-sized US banks (the most thorny case is First National) remains open for now: BanCorp has purchased some parts of the failed Signature Bank, but for now no buyer has emerged for Svb while the flight of deposits from small banks to the larger ones continues.
In summary, thebanking emergency it remains the dominant note on the markets, indeed the only one even in a week full of very important geopolitical appointments, such as the visit of President Xi to Moscow.
In this context, the intervention network developed by the large central banks to ensure the liquidity of the system. The operation falls on the eve of the appointments of the monetary authorities. Thursday the Fed will announce his decisions on rates: once the hypothesis of a half-point increase has faded, the most probable option is a 0,25% hike, but it is not excluded that Jay Powell, given the situation, will decide to postpone the intervention, despite the fact that inflation is far from tamed. This should be the decision of the Bank of England.
Opening in Europe slightly down
The market landscape looks like this:
- European stock exchanges open lower, a fall anticipated by EuroStoxx50 futures -0,2%.
- Bond yields are falling further and further, due to the effect of the risk flight triggered by the full zeroing of the nominal value of all Credit Suisse AT1 bonds, for an amount equal to approximately 16 billion francs.
- Il Treasury Notes a 3,41-year term is 3,56%, up from 14% on Friday. The yield on the Australian XNUMX-year bond fell by XNUMX basis points.
- Euro-dollar little moved at 1,067.
Meanwhile, China leaves rates unchanged
- In Asia the Nikkei of Tokyo loses 1%. Kospi of Seoul -0,7%. The Shanghai Stock Exchange is on parity. China left rates unchanged.
- Stable gold at 1.974 dollars.
- WTI oil down to $66.
Stellantis will build the 500 in Algeria, the gas ship in Piombino
They arrive this morning first coupons 2023: Eni pays the third tranche of the dividend, first payment for stm.
- Unicredit - Proxy adviser Glass Lewis recommends that bank shareholders vote against the executive compensation policy. Allianz is in favor of the new remuneration mechanism for the UniCredit CEO.
- Eni – No license has been awarded to Eni and Lukoil in Congo. This was specified by an Eni spokesman in reference to what was reported by the Russian news agencies on Friday.
- stellantis – The automaker will spend over 200 million euros to produce four Fiat models in Algeria starting with the Fiat 500 in December 2023.
- Snam – Extraordinary Commissioner Eugenio Giani and some Snam executives will be in Piombino today to celebrate the arrival of the Golar Tundra regasifier ship which should become operational in May.
- Fincantieri – The treasury share purchase program to service the existing incentive plans approved by the company will start on 20 March for a maximum number of Fincantieri shares of 10 million, corresponding to approximately 0,59% of the company's share capital.
