Today’s Stock Exchanges, June 12th. UBS closes the acquisition of Credit Suisse
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MILAN – A cautious upward start is announced for Western stock exchanges, in a week marked first by US inflation (Tuesday) and then by moves by the Fed and the ECB, but also by China and Japan. Even while waiting for these developments, in fact, it was a substantially muted session for the Asian stock exchanges. As Bloomberg recalls, concerns related to Chinese growth remain, while technology shares are at the center of a bullish phase explained by investors’ bets on the proximity of the end of the Fed’s hike cycle.
Meanwhile, Ubs has formalized the closing of the operation that leads it to acquire Credit Suisse. Thus, after more than a century and a half, the autonomy of the Swiss bank which had almost ended upside down due to a series of managerial and reputational errors, but cuts and strict rules are expected from the new Swiss giant to avoid the mistakes of the past .
Futures up for Wall Street
Slightly positive futures on Wall Street in view of a week full of events: US inflation data will be released tomorrow while the Fed board will meet on Wednesday, with analysts predicting a pause in the cycle of interest rate hikes. At the moment the contracts on the Dow Jones mark +0.04%, on the S&P +0.18% while on the Nasdaq +0.32%.
Weak Asian stocks
Asian stock markets are down with the exception of Tokyo where the nikkei gains 0.70%. Hong Kong shares fell after a positive open as traders awaited a key Federal Reserve decision later in the week. The Hang Seng index dropped 0.18% to 19,346 points. The Shanghai Composite Index lost 0.27%, settling at 3,223 points while the Shenzhen Composite Index of China’s second largest exchange is on par at 10,793 points. Seoul’s Kospi is also down by 0.30%, while Tokyo continues sustained with the Nikkei at +0.7%.
The economic slowdown weighs on oil
Oil prices still falling as investors fear a slowdown in global demand. There are signs of a slowdown in Chinese demand growth after macro data showed a weaker-than-expected recovery for the world’s largest crude importer. In Asian markets, contracts on WTI are traded at 69.3 dollars a barrel, down by 1.08%, while those on Brent at 73.7%, down by 1.23%.
Ubs concludes the acquisition of Credit Suisse: cuts and rigid stakes are on the way
The acquisition of Credit Suisse by UBS is completed and thus the two Swiss banking rivals become a single institution: it is the largest merger in the banking sector since the 2008 financial crisis. The Swiss bank announced the closing of the operation with a open letter published on Monday in local and international newspapers. The Credit Suisse acquisition ends the lender’s 167-year independence Bloomberg. The announcement comes at the end of more than two months of uncertainty for employees after UBS concluded talks with the Swiss government over a 9 billion Swiss francs ($10 billion) guarantee against potential losses related to the assets of the Credit Suisse which it went to absorb. The deal provides UBS with tens of billions of dollars in capital gains and ushers in a period of complex integration likely to result in thousands of job cuts. According to what was collected by the FT on the eve of the official announcement, UBS will dictate very strict rules to the Credit Suisse bankers: a stop to the acquisition of new customers from high-risk countries and a ban on the use of complex financial products.
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