Asia-Pacific markets fall on bank fears, Credit Suisse announces ‘decisive action’ to borrow

The chairman of Saudi National Bank, the largest shareholder of Credit Suisse, told CNBC’s Hadley Gamble that the recent market turmoil in the banking sector was “isolated” and stemmed from “a bit of panic.” .

“Unfortunately, when you see how the entire banking sector has fallen, a lot of people were looking for excuses … It’s a panic, a little panic,” Amal Al-Qudairi said on CNBC’s “Capital “Connections,” he said.

He added that Credit Suisse did not seek financial support from the Saudi National Bank.

“We have not had any discussions with Credit Suisse about providing support,” he said. “I don’t know where the word ‘support’ came from. There hasn’t been any discussion since October,” he said.

His comments came after Credit Suisse said it would borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank to boost liquidity and investor confidence after its stock price plunged on Wednesday. issued.

– Lee Ji Hye

The China Securities Regulatory Commission has suspended approval to sell new global depository receipts, Bloomberg reported, citing people familiar with the matter.

The regulatory moratorium comes from concerns that the GDR sale could put pressure on mainland-listed stocks. Chinese investors later converted the securities into Chinese equities and profited from the price difference, the report adds.

Bloomberg reported that Chinese regulators are considering new rules for offerings.

– Lee Ji Hye

Federal Deposit Insurance Corporation regulators have asked banks interested in buying the closed bank, Silicon Valley Bank and Signature Bank, to submit bids by March 17, Reuters reported.

The FDIC is looking to sell both SVB and Signature outright, but if a sale of the entire company does not materialize, it could consider an offer for some of the banks, a person familiar with the matter said. citing a person.

This will be the FDIC’s second attempt to sell the SVB after Sunday’s failed attempt.

Two sources cited by Reuters added that Signature buyers would have to agree to abandon all crypto business in banks.

— Lim Hijie

New Zealand’s Gross Domestic Product fell 0.6% in the quarter ending December 2022, reversing from a 1.7% rise in the previous quarter.

Full-year 2022 GDP expanded by 2.2% from the 6% recorded for the whole of 2021.

Of the 16 industries, only 5 saw an increase in activity compared to the previous quarter.

Manufacturing was the biggest driver of the decline, down 1.9%.

— Lim Hijie

The Swiss franc has seen continued volatility following the developments over Credit Suisse, and has finally rallied against the U.S. dollar to stem previous weakness after lenders announced they would borrow about $54 billion from the Swiss National Bank. increased by 0.17%.

The Japanese yen has also seen further strengthening to trade at 132.86 against the dollar. The Korean won rose 0.13% against the dollar to 1,311.24 yen.

– Lee Ji Hye

Credit Suisse announced that it will borrow up to CHF 50 billion ($53.69 billion) from the Swiss National Bank under the Covered Loan Facility and the Short-Term Liquidity Facility.

This move “will allow Credit Suisse’s core business and customer support,” the company said in a statement.

In addition, the bank has made a cash tender offer for aggregate consideration up to $2.5 billion in connection with 10 US dollar-denominated senior debt securities. A separate proposal is also being made for four Euro-denominated senior debt securities with an aggregate value of up to 500. million euros, the company said.

Please check this out for details.

– Lee Ji Hye

South Korean and Australian banks recaptured earlier losses after Swiss financial institution Credit Suisse announced liquidity measures to ease investor fears.

Australia’s Commonwealth Bank reversed most of its losses in volatile trading. So far he has fallen 0.15% after falling 1.97%.

Westpac Banking and National Australia Bank erased some of that decline after falling 2.35% and 1.81% respectively, ending with a 1.34% and 0.58% decline.

Some South Korean banks were down 2% earlier. Woori Financial Group dropped 1.62% last, Shinhan Finance dropped his 1.69%, and KB Kookmin Bank dropped his 1.12%.

— Lim Hijie

After Credit Suisse announced that it would “preemptively enhance liquidity” by borrowing CHF 50 billion ($54 billion) from the Swiss National Bank and offering a public auction of bonds worth CHF 3 billion, Japan banks narrowed some losses slightly on Thursday morning. .

Prior to the announcement, MUFG’s share price fell more than 5% and was Topix’s biggest loser, narrowing to a loss of just 3.35%. Meanwhile, Sumitomo Mitsui Financial Group fell 5% on him before returning to a 3.59% decline.

Overall, it was down more than 2% before the announcement, but is now down slightly to 1.4%.

— Lim Hijie

Australia’s unemployment rate fell slightly to 3.5% in February from 3.7% in January, seasonally adjusted government data showed.

This is below expectations for the unemployment rate of 3.6%, according to a Reuters poll.

The economy’s labor force participation rate was 66.6%, up from 66.5% seen in the previous month, as expected.

The Australian dollar gained 0.23% against the US dollar to 0.6630.

Japan’s trade deficit widened to ¥897.7 billion ($6.76 million) in February, a 26.2% year-on-year increase.

Exports increased by 6.5% in February, while imports increased by 8.3%, according to government data. These were below economists’ forecasts of 7.1% and 12.2% growth in exports and imports respectively.

In particular, Japanese exports to Europe and America increased by 18.6% and 14.9% respectively on an annualized basis, while exports to China fell by 10.9%.

— Lim Hijie

Japan’s Shunto wage talks ended Wednesday, marking the biggest wage increase not seen in decades, according to Reuters.

Analysts polled by Reuters expect economy-wide wages to rise by about 3%, the biggest rise since 1997.

Prime Minister Fumio Kishida called for better wages for Japanese workers, citing currency depreciation and higher commodity prices leading to higher import costs in an overall high-inflation environment, the report said.

– Lee Ji Hye

First Republic Bank is considering options to boost liquidity, including selling lenders, Bloomberg reported, citing people familiar with the matter.

The bank is expected to draw interest from rivals and no decisions have been made, the report said.

Bank shares rose 3.92% in after-hours trading Wednesday night in the US. This is after he rose more than 20% earlier this week alongside local banks.

Goldman Sachs on Wednesday cut its economic growth forecast for 2023 by 0.3 percentage points to 1.2%, citing weaker lending from smaller banks amid broader financial system turmoil.

Analysts say smaller banks will seek to preserve liquidity in case they need to meet depositor withdrawals, and bank lending standards could tighten significantly, weighing on aggregate demand. I expect. “Small and medium-sized banks play an important role in the U.S. economy,” they wrote.

Banks with less than $250 billion in assets account for about 50% of U.S. commercial and industrial lending, the firm notes. Click here to read more.

— Pia Singh

The Swiss National Bank said on Wednesday it would provide liquidity to bank giant Credit Suisse if needed.

In a joint statement, the SNB and the Swiss Financial Market Supervisory Authority said: “

Credit Suisse shares were under pressure Wednesday after the bank’s biggest investor said it would not provide further financial support. Credit Suisse’s U.S.-listed stock has fallen more than 18% in recent months.

— Fred Imbert

Credit Suisse shares fell more than 23% as the market opened. Stocks fell to an all-time low of $1.75.

Swiss bank troubles are reigniting turmoil in financial stocks, putting pressure on mid-sized US banks in particular. The Saudi National Bank, the bank’s largest investor, said it could not provide further financial support to the company.

— Christina Cheddar Burke

Swiss lender Credit Suisse ADR shares fell 21% in pre-market trading.

The Saudi National Bank said it could not provide more funding, Reuters reported. “We can’t do that because it would be over 10%. This is a regulatory matter,” Saudi National Bank Governor Amal Al-Qudaily told Reuters on Wednesday.

The troubled Swiss bank said earlier this week that it had found “significant weaknesses” in its 2022 and 2021 financial reports.

— John Melloy