Source: Securities trader China
Late at night, the most popular joke was: Credit Suisse fell into Lucky!
On Wednesday night Beijing time, the peripheral market was really miserable. The stock indexes of all major European markets fell by more than 3% at one time, Credit Suisse At one time, the Swiss market dropped nearly 30%, and France BNP Paribas 、 Societe Generale Bank share prices also plummeted. The US stock market also opened quite bleakly. The stock price of First Republic Bank, headquartered in San Francisco, fell 21% at one time. Citigroup and Wells Fargo Bank (Wells Fargo) fell by more than 4% at one time.
So what happened? The first "stabler" was Saudi National Bank. Credit Suisse's fall was due to the fact that its biggest supporter, Saudi National Bank, said it would not provide further financial assistance to the bank. This can be said to be the direct cause of the collapse of Credit Suisse. Secondly, S&P downgraded the rating of First Republic Bank to junk level and listed it on the negative watch list. This news may have led to a sharp drop in the share price of the bank and other well-known big banks. S&P became the second "knife stabber".
At this time, the White House also came out to speak. According to Reuters, a US official said on Tuesday (14th local time) that after the collapse of the Silicon Valley Bank last week and the US government's measures to protect depositors, the White House is closely following the developments of the First Republic Bank and other small banks.
So, how big will the impact be?
Late night slump
Wednesday night Beijing time may be a nightmare for European and American investors. European stock markets as a whole fell by more than 3% at one time. Judging from the decline, the European market, which had been bullish for some time, showed an irresistible decline on Wednesday.
Credit Suisse, listed on the Swiss market, fell by 30% at one time. Credit Suisse, which was listed in the US market, also fell by nearly 30%, and its market value was once close to that of Ruixing Coffee. Therefore, a joke spread in the evening: Ruixing's market value is about to catch up with that of Credit Suisse, and Credit Suisse certainly did not expect such a day on the day when it helped Ruixing do the IPO!
Carlo Franchini, head of Banca Ifigest Bank's institutional accounts, said that the market was crazy, Bank of America The problem turned to European banks. Credit Suisse was the first to be hit, which is becoming the key to drag down the entire European banking industry. The company's share price accelerated its decline after the Saudi National Bank expressed its unwillingness to further support the bank. It is believed that the crisis of Credit Suisse can be solved, the bank will not be completely collapsed, and the problem will be who can take over.
In fact, not only Credit Suisse, but also the banking stocks in the whole European market are not very good, especially the two major French banks, BNP Paribas and Societe Generale. The former once fell nearly 10%, while the latter fell nearly 12%.
After the stock market plummeted, French Prime Minister Bernard Borne said urgently that French banks had no risk exposure in Silicon Valley banks. The current situation of the global economy is quite different from that of 2008. Mcguinness, the head of EU financial services, also said that the banking industry of EU member states was in good condition and flexible. According to the Wall Street Journal, ECB officials contacted the bank to ask about the bank's risk exposure to Credit Suisse.
In addition, according to the statement of the spokesman of the Bank of France, "French banks have not been affected by the Silicon Valley banking incident", according to the European Times, the Comprehensive Agence France Presse and the Parisien. This statement is consistent with what Minister of Economy Lehmer said earlier on France Info. "I didn't see any risk of infection, so there was no specific warning." Lehmer said, "What happened in the United States is very single. It is a bank with great risks in the field of science and technology, and its difficulties are related to the increase of interest rates."
BaFin, the German banking regulator, also said: "The critical situation of the German branch of Silicon Valley Bank does not pose a threat to financial stability." However, the agency still suspended the activities of the German branch until the situation was clarified.
The "knife stabber" appeared
In terms of decline, Credit Suisse suffered the largest decline, and this company should be the direct cause of the sharp decline of European bank shares. So what happened to Credit Suisse?
First of all, Credit Suisse said on Tuesday that it had found "some major weaknesses" in its internal control over financial reporting in 2021 and 2022. The company also recently confirmed its 2022 results announced on February 9, with a net loss of 7.3 billion Swiss francs (about 8 billion US dollars).
Secondly, the direct reason for the sharp decline of the Bank may still come from the Saudi National Bank. According to Reuters, Saudi National Bank, the largest investor of Credit Suisse, said it could not provide any further financial assistance to Credit Suisse. "We can't, because we will exceed 10%. This is a regulatory issue," said Amar Al Houdali, chairman of the Saudi National Bank on Wednesday. However, he added that the Swiss Central Bank was satisfied with the transformation plan of Credit Suisse and hinted that the bank was unlikely to need additional funds.
Axel Lehmann, chairman of Credit Suisse, said on Wednesday that the contagion effect of the recent collapse of Silicon Valley Bank was local and controllable. He also declined to comment on whether Credit Suisse needed any form of government assistance.
In fact, in addition to European bank stocks, American bank stocks also fell sharply on Wednesday night. The shares of First Republic Bank, headquartered in San Francisco, fell 21%. Citigroup and Wells Fargo both fell more than 4% at one time.
It is possible that S&P, a rating agency, is the initiator of the collapse of the First Republic Bank. On Wednesday night, S&P downgraded the First Republic Bank to junk status and listed it on the negative watch list. The agency believes that the risk of deposit outflows from the First Republic Bank has increased. The deposit base of the First Republic is more concentrated than that of most large regional banks in the United States, which means higher financing risk. It is expected that the increase in wholesale borrowing will further depress the net interest margin of the First Republic Bank.
The White House makes an emergency voice
As the situation developed, the White House could not sit still.
According to the World Wide Web, citing Reuters, a US official said on Tuesday (14th local time) that after the collapse of the Silicon Valley Bank last week and the US government's measures to protect depositors, the White House is closely following the developments of the First Republic Bank and other small banks. According to the report, when asked whether other regional banks still have run risk, the official said that after taking relevant actions, the state of the U.S. banking system is "much better", and depositors should believe that their deposits can be protected.
"We have spent a lot of time to ensure that we can tide over the difficulties smoothly." The official said that the White House is in close contact with the US Treasury Department and the Federal Deposit Insurance Corporation (FDIC) to discuss possible problems of other banks with the same size as Silicon Valley banks. "Of course, we are paying attention to the situation of the First Republic Bank. They are one of the banks under greater pressure, but we have not announced any relevant action at present." The official added that the White House is also closely watching whether there is capital outflow to large banks.
So, how much impact will it have on A-shares? From the perspective of capital, the sharp decline in the stock markets in Europe and the United States may affect the attitude of foreign investors to be long, and may even trigger foreign capital outflows, but it still depends on how big things are. From the current official position, things may not be too big, but still need to be vigilant; From the perspective of valuation, we seem to be concerned about the stock market, while ignoring the bond market. On Wednesday night, the national debt of all maturities rose sharply, and the yield of national debt plummeted. At the same time, the market's expectation for the rate increase in March and the next few months has dropped significantly. This is actually a good thing for stocks. Judging from the structure of A-share itself, this round of adjustment may take some time, but if the financial events do not continue to deteriorate, they should soon reach the relative bottom.
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