Credit Suisse share crisis sends tremors across global financial sector

By Hiran H. Senewiratne

The global financial sector is facing uncertainty with the slashing of shares of one of the largest banks in the world, Credit Suisse, this week, market analysts said.The Swiss Central Bank said it was ready to provide financial support to Credit Suisse, the beleaguered megabank, hoping to reassure investors that it had the necessary cash to stay afloat.

“This additional liquidity would support Credit Suisse’s core businesses as we take the necessary steps to create a simpler and more focused bank built around client needs, the bank said in a statement.

In addition to loans from the Central Bank, Credit Suisse said it repurchased billions of dollars of its own debt to manage its liabilities and interest payment expenses. The offer covers US $2.5 billion of US dollar bonds and €500 million ($529 million) of euro bonds.

This week Silicon Valley Bank, the 16th largest bank in America, the bank of choice for tech startups, also collapsed. This impacted the global banking sector, stock market analysts said.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 8.76 points and S and P SL20 rose by 2.8 points. Turnover stood at Rs 1.2 billion without any crossings.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 124 million (862,000 shares traded), Dialog Rs 86.5 million (8.1 million shares traded), Hayleys Rs 69.1 million (865,000 shares traded), Expolanka Holdings Rs 63.3 million (435,000 shares traded), Access Engineering Rs 61.3 million (four million shares traded), Lanka Tiles Rs 51.3 million (947,000 shares traded) and Browns Investments Rs 45.7 million (7.1 million shares traded). During the day, 71.7 million share volumes changed hands in 17000 transactions.

The rupee closed around Rs 339 to the US dollar yesterday. Business was done at Rs 340 in spot and Rs. 337 to the dollar in the cash market, dealers said. Commercial banks were buying dollar telegraphic transfers at Rs. 335 and selling at Rs. 355.