Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Credit Suisse shares rally while Archegos ripples spread

EconomyApr 01, 2021 01:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Logo of Swiss bank Credit Suisse is seen in Zurich

By Takashi Umekawa and Oliver Hirt

TOKYO/ZURICH (Reuters) -Credit Suisse shares rose on Thursday, ending a losing streak in which they shed close to a fifth of their value, though the lender is yet disclose how much it lost in trades for stricken U.S. fund Archegos.

Defaults on margin calls by Archegos Capital, a family office run by former Tiger Asia manager Bill Hwang, caused a clutch of banks to rapidly unwind billions of dollars of his leveraged trades.

Credit Suisse (SIX:CSGN) and Japan's Nomura have borne the brunt of those losses, with the Swiss lender warning it could have a "material impact" on its profits, but details of who else was exposed to Hwang are still emerging.

Japanese financial firm Mizuho Financial Group Inc may face a loss of 10 billion yen ($90 million) from deals with Archegos, the Nikkei newspaper reported on Thursday.

"We refrain from making comments on individual deals, but we don't currently see any issue that may affect our profit forecast," a spokeswoman for Mizuho said, adding the bank does not conduct prime brokerage services globally.

Mizuho's U.S. subsidiary has lent to Archegos, the Nikkei reported.

Mizuho rival Nomura has said it expects to book a $2 billion loss on Archegos.

Credit Suisse is expected to detail in the coming days the scale of the losses it is facing as a result of its dealings with Archegos, according to a source familiar with the matter. Two sources close to the bank said they could be as high as $5 billion, a figure the bank has declined to comment on.

Switzerland's second largest lender has lost almost a quarter of its value over the past month, hit first by worries over its exposure to collapsed UK supply chain firm Greensill and then Archegos. Supply chain funds run by the bank had invested $10 billion in securities issued by Greensill, and it is not clear how much of that they will get back.

The bank said in a notice to investors on Wednesday that it expects to get the "majority" of that money to be recovered.

Its shares were up 2.6% on Thursday though still down 18.5% for the week, while Nomura closed up 0.22% but is down 19% since Monday.

Credit Suisse's CoCo, or contingent convertible dollar bond maturing Dec 2023 has fallen more than three cents in price since last Friday and is now trading at 107.7 points, the lowest since July, MarketAxess data shows.

Average daily trading volumes in the bond spiked in March over $1.9 billion compared to February levels of $710 million.

Shares of big U.S. banks were headed to end the holiday-shortened week on Thursday with a mix of gains and losses of 2% or less, despite expectations for new regulatory scrutiny of trading they do for funds.

Credit Suisse shares rally while Archegos ripples spread
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email