Credit Suisse, UBS Shares Dip After Last Minute Takeovers
Equity markets remained nervous on Monday as they opened following the announcement of the acquisition of Swiss lender Credit Suisse on Sunday by UBS and Swiss National Bank.
The purchase of 3 billion Swiss francs (3.23 billion dollars, 3.03 billion euros) was agreed after negotiations over the weekend that lasted until Sunday night, ending shortly before the opening of financial markets on Monday. fair in New Zealand, Australia and East Asia.
The Credit Suisse bailout has rocked Switzerland, a country that has built its reputation as a safe banking and financial centre.
Shares in the lending giant fell more than 60% in Zurich on Monday morning, falling below the price paid for UBS, whose share price fell more than 8%.
Stock prices fall in Monday’s trading
The European banking index fell 3.2% on Monday, its lowest level in three months.
Stock markets around the world fell on Monday, with Hong Kong’s main index down 2.65% at the end of the day.
The UK, Germany and France were also hit, with the main indexes in London, Frankfurt and Paris all falling around 1%.
Asian stocks, meanwhile, fell on Monday despite news of UBS’ takeover of Credit Suisse and shortly after a sell-off in New York amid fears of a financial sector meltdown.
Tokyo stocks were down after Monday’s trading, with the benchmark Nikkei 225 index down 1.42%, or 388.12 points.
As part of the deal, the Swiss authorities ordered the writing off of junk bonds worth a total of 16 billion Swiss francs. So-called Tier 1 Addition Bonds (AT1) were created after the 2008 financial crisis to place losses on high-risk investments on investors rather than taxpayers.
Germany’s biggest bank, Deutsche Bank, responded to the news by saying its exposure to AT1 bonds was “close to zero”.
Source: DW
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