Asia markets UBS, Credit Suisse; China, loan prime rates
2 hours ago
Hong Kong regulators say Credit Suisse branches will open for business as usual
Hong Kong’s monetary authority and its Securities and Futures Commission announced that Credit Suisse operations in the city will continue as usual, following the UBS takeover of the troubled bank at the weekend.
Credit Suisse’s operations in Hong Kong include a branch under the supervision of the HKMA and two licensed companies under the supervision of the SFC.
The regulators said that “customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong̵[ads1]7;s equity and derivatives markets.”
“The exposures of the local banking sector to Credit Suisse are negligible,” regulators pointed out, adding that total assets of the Hong Kong branch amounted to about HK$100 billion (US$12.74 billion), representing less than 0.5% of the banking sector.
Shares in Hong Kong banks fell sharply on Monday morning, with HSBC shedding 4.37% and being one of the biggest losers on the HSI, while Standard Chartered shed 3.81%.
48 minutes ago
Shares in Australian gold miners rise as gold trades near one-year highs
Shares in Australian gold miners rose on Monday morning as gold prices traded near one-year highs, bucking the broader trend in Australian markets.
Gold traded at $1,977.70 an ounce on Monday, its highest level since April 2022.
Evolution Mining led the gold mining sector as shares jumped 11.05%, while Newcrest Mining and Kingsgate Consolidated also saw gains of 5.58% and 3.36% respectively. The broader S&P/ASX 200 fell 1.2%.
— Lim Hui Jie
2 hours ago
BOJ continues ultra-loose monetary policy, expects inflation to slow
The Bank of Japan predicted that inflation could ease this year, according to the central bank’s summary of opinions from its March meeting.
“The year-on-year increase in the consumer price index (CPI) is likely to slow towards the middle of fiscal year 2023 due to the effects of pushing down energy prices from the government’s economic measures,” the report said.
Although the BOJ noted that Japan’s economy has been “resilient on the whole”, it also expressed the need to continue with monetary policy.
“Until achievement of the price stability target of 2% is sufficiently in sight, it is necessary for the bank to continue with current monetary policy easing, including management of the yield curve,” the report said.
Japan’s February CPI reading eased from a 42-year high to 3.3%.
– Lee Ying Shan
2 hours ago
Credit Suisse takeover ‘not expected to have an impact on Singapore’s banking system’: MAS
The Monetary Authority of Singapore (MAS) said on Monday that UBS’s takeover of troubled rival Credit Suisse is not expected to affect the stability of Singapore’s banking system.
“MAS said today that Credit Suisse Group AG will continue to operate in Singapore without interruption or restriction, following the announced takeover by UBS Group AG. Customers of Credit Suisse will continue to have full access to their accounts and Credit Suisse’s contracts with counterparties remain in effect,” MAS said in a statement on Monday.
“The takeover is not expected to have any impact on the stability of Singapore’s banking system,” MAS said.
MAS added that both banks do not serve retail clients, as their primary activities in Singapore are in private banking and investment banking.
The Straits Times Index fell 0.58% in early trade. Shares in DBS Bank rose 0.15%, while OCBC Bank and UOB fell 0.49% and 0.18% respectively.
3 hours ago
China leaves 1- and 5-year prime rates unchanged
The People’s Bank of China left 1-year and 5-year lending rates unchanged, after cutting the reserve requirement ratio for almost all banks by 0.25 percentage points last week.
The 1-year LPR remained at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since last August.
The offshore Chinese yuan gained 0.14% to trade at 6.8795, while the onshore Chinese yuan was flat and traded at 6.885 against the US dollar.
— Lim Hui Jie
3 hours ago
Mid-sized US banks are reportedly asking the FDIC to insure deposits for the next two years
The Mid-Size Bank Coalition of America has asked regulators to guarantee all deposits for the next two years, according to a Bloomberg report.
The report cited a letter from the MBCA, in which the coalition argued that deposit insurance would stop rapid withdrawals from smaller banks and stabilize the banking sector.
The MBCA proposed that the banks themselves finance the expanded insurance program by increasing the deposit insurance rating, the Bloomberg report said.
The coalition’s request comes after U.S. Treasury Secretary Janet Yellen said not all depositors will be protected above the FDIC insurance limits of $250,000 per account, despite the FDIC insuring all deposits for Silicon Valley Bank and Signature Bank.
– Yeo Boon Ping
3 hours ago
CNBC Pro: Time to Buy Tech Rally? Hedge fund manager Dan Niles and others reveal their top picks
The technology sector was a bright spot last week as the banking crisis rocked the markets.
But is it time to buy into the rally? Market professionals urge caution – but believe some stocks are set to outperform.
CNBC Pro subscribers can read more here.
— Weizhen Tan
3 hours ago
Central banks jointly agree to increase dollar liquidity to ease the pressure
The US Federal Reserve along with five other central banks have jointly announced to increase the frequency of their US dollar swap lines from weekly to daily.
The five central banks are the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.
The frequency of 7-day maturity operations will increase from weekly to daily, starting March 20 and continuing until “at least” the end of April.
In doing so, the monetary authorities said the move would “serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the availability of credit to households and businesses.”
The move comes ahead of the Fed’s two-day meeting this week announcing its intentions on interest rates.
—Lim Hui Jie, Jeff Cox
3 hours ago
CNBC Pro: From Tesla to under-the-radar battery stocks: Wall Street has a playbook for the EV boom
The opportunities in global electric cars are huge, with the European market alone set to be worth $300 billion by 2030, according to Bernstein estimates.
While EV makers may be an obvious play, Wall Street analysts have named a number of stock picks across a range of sectors as a way to make money.
Pro subscribers can read more here.
— Zavier Ong
5 hours ago
The FDIC is selling Signature Bank assets to the New York Community Bank entity
The FDIC announced an agreement to sell “substantially all deposits and certain loan portfolios” of Signature Bank to Flagstar Bank, a subsidiary of New York Community Bancorp.
The agency said Signature’s 40 former branches will begin operating under Flagstar’s name on Monday.
The deal involves $38.4 billion of Signature’s assets, including $12.9 billion of loans that the FDIC said were purchased at a discount of $2.7 billion.
However, it said Flagstar’s bid did not include the roughly $4 billion in deposits tied to Signature’s digital banking business. The agency said it will provide these deposits directly to digital banking customers. The FDIC also said that about $60 billion in loans will remain in receivership.
— Christine Wang
6 hours ago
UBS buys Credit Suisse in a $3.2 billion takeover
UBS finalized a deal to buy rival Credit Suisse for $3.2 billion. Swiss regulators played a key role in facilitating the deal in an effort to stem a contagion threatening the banking sector.
Credit Suisse saw its shares fall last week after its biggest investor, Saudi National Bank, refused to provide additional funding. Despite subsequent measures by Credit Suisse and Swiss regulators to calm investors’ fears — including a loan of up to 50 billion Swiss francs ($54 billion) — shares plunged 25.5% by the end of the week.
Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion of invested assets, according to UBS.
—Hakyung Kim
Fri Mar 17, 2023 2:10 PM EDT
The Fed’s interest rate decision may be influenced by what happens in the coming days, says the economic correspondent for the WSJ
The Federal Reserve’s decision on whether to raise interest rates by 25 basis points or not at next week’s policy meeting could depend on what happens in the coming days, said Nick Timiraos, chief economist at The Wall Street Journal.
The Fed is expected to approve a 25 basis point rate hike at its meeting next week. But market observers say the central bank’s next decision on interest rates has been made less certain in the past week amid the banking crisis.
“I’m hearing the same thing everyone else is hearing, which is that there’s a case to be made to go within 25, and there’s a case to skip,” he said on CNBC’s “The Exchange.” “I think it really depends … on what happens with the state of the markets and this risk of financial instability over the next few days.”
– Alex Harring
Fri Mar 17, 2023 3:37 PM EDT
Selling of First Republic Bank intensifies as investors look ahead to the weekend
First Republic Bank took another leg lower in afternoon trading, plunging more than 30% as investors positioned themselves in the final hour of trading this week. Friday’s plunge has brought the stock down more than 70% from where it started the week.
The drop has also weighed on the SPDR S&P Regional Banking ETF (KRE), which was down 6% on Friday and is poised for a weekly loss of more than 14%.
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Fri Mar 17, 2023 8:48 AM EDT