The Swiss Stock Exchange opened higher on Thursday, with the key to a spectacular rebound in Credit Suisse shares, whose price remains lower than yesterday before falling dramatically. The news remained dominated by the problems of the bank.
In a joint press release published on Wednesday evening, the Swiss National Bank (SNB) and the Financial Market Supervisory Authority (Finma) recalled that Credit Suisse met the capital and liquidity requirements, while the former pledged to provide liquidity to the bank of the two sails in case of need.
Overnight, Credit Suisse officials said the institution would borrow up to 50 billion francs in cash from the SNB and offered to buy up to 3 billion francs in dollar and euro-denominated debt. This should reassure markets in the short term, said John Plassard of Mirabaud Banque in a commentary.
Market fears for Credit Suisse’s future have driven the bank’s cost of insuring bonds (CDS) against near-term default to alarming levels, the analyst said. Moreover, five-year credit default swaps have never been so high, which penalizes the chances of recovery.
This afternoon, the monetary policy decision of the European Central Bank (ECB) will be in focus. Given the pressure on banking stocks, a 50 basis point rise is far from certain, said Ipek Ozkardeskaya of Swissquote. It could opt for a milder rate hike or no hike at all.
At 9:13 a.m., the SMI index advanced by 1.16% to 10,638.90 points. Of the 30 SLI shares, only Roche, treated excluding dividends, lost ground.
Credit Suisse rebounded 28.0% following statements from the SNB and Finma last night and after management announced overnight that it was borrowing from the SNB to pay off debts and that it was going to borrow up to 50 billion francs to the issuing institution.
Banking stocks were at the top of the table, with Julius Bär taking 6.5% and UBS 5.4%.
Financial stocks also performed clearly better than the market. Swiss Re advanced by 2.8%, Swiss Life by 2.5%, Partners Group by 2.2% and Zurich Insurance by 2.0%.
Swiss Re had an SST solvency rate of 294% at the start of the year, the annual report said.
Roche (-2.8%) brought up the rear, traded excluding the dividend, distorting something for the SMI with all its weight. At the bottom of the rankings were Swisscom (+0.5%) and Nestlé (+1.0%).
This article has been published automatically. Source: ats/awp