CS Shares Halted Amidst Volatility
It’s been a volatile week for Credit Suisse. Investors still holding onto shares have certainly been put through the wringer with CS stock cratering more than 30% from the week’s opening price, now down more than 50% on the year. Indeed, CS shares were suspended yesterday as volatility ratcheted higher, offering the bank some breathing room.
Saudi Backers Cut Support - SNB Steps In
Yesterday’s fall came as the bank’s main investor Saudi National Bank announced that it would not offer any further financial support. On the back of heavy capital outflows and spiralling liquidity concerns, many feared the end for the bank yesterday. However, Credit Suisse was able to land a last-minute rescue deal with the SNB which will give CS CHF50 billion and allow it to buy back debt.
Fending off accusations that it is headed the same way as SVB, CS notes that it doesn’t suffer from the same duration mismatches in its bond portfolios. Furthermore, the bank noted it is launching a tender to buy back around $3billion of debt.
Will SNB Backing Be Enough?
However, whether the moves will be enough to shore up confidence in the bank is yet to be seen. CS has been under heavy pressure since early 2021 and has a long way to go to claw back the value it once had. If banking sector volatility continues or worsens near-term, the bank might find itself running out of options.
Technical Views
Credit Suisse
The breakdown below the 2.91 level has seen the market extending sharply lower within the bear channel which has framed the recent decline. Current lows of 1.73 mark the only support below market with bulls needing to see a break of 2.91 and the channel top to alleviate current bearishness.
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