Asia markets UBS, Credit Suisse; China, prime rates on loans

According to Mitul Kotecha, head of emerging markets strategy at TD Securities, emerging markets could perform “pretty strong” in the coming years after a “terrible” 2022.

They may even start to perform well this year “once we get through this shock,” Kotecha said in reference to the collapse of regional banks in the US.

The financial services company expects the US dollar and US Treasury yields to weaken further this year, boding well for emerging market currencies and local bonds.

“I think emerging markets will do well not only in the medium term, but also in the longer term,” Kotecha predicted.

— Charmaine Jacob

Hong Kong Monetary Authority and its Securities and Futures Commission announced Credit Suisse operations in the city are continuing as usual following UBS’ takeover of the embattled bank over the weekend.

Credit Suisse’s operations in Hong Kong include a branch overseen by the HKMA and two licensed firms overseen by the SFC.

The regulators said that “clients can continue to access their deposits with the branch and trading services that Credit Suisse provides for Hong Kong’s equity and derivatives markets.”

“The exposure of the local banking sector to Credit Suisse is insignificant,” regulators noted, adding that the total assets of the Hong Kong branch were about HK$100 billion (US$12.74 billion), which is less than 0. represents 5% of the banking sector.

Shares of Hong Kong banks fell sharply on Monday morning, with HSBC losing 4.37% and one of the biggest losers on the HSI, while Standard Chartered lost 3.81%.

Shares of Australian prospectors rose on Monday morning as the price of gold nearly hit a year-high, bucking the broader trend in Australian markets.

Gold traded at $1,977.70 an ounce on Monday, its highest level since April 2022.

Evolution Mining led the gold mining industry as its shares rose 11.05%, while Newcrest Mining and Kingsgate Consolidated also posted gains of 5.58% and 3.36% respectively. The broader S&P/ASX 200 fell 1.2%.

— Lim Hui Jie

The Bank of Japan predicted that inflation could ease this year, according to the central bank summary of the opinions of the March meeting.

“The year-over-year rate of increase in the consumer price index (CPI) is likely to slow by the middle of fiscal 2023 due to the effects of government economic measures lowering energy prices,” the report said.

While the BOJ noted that Japan’s economy has been “broadly resilient,” it also expressed the need to continue its monetary easing policy.

“Until the achievement of the 2% price stability target is sufficiently in sight, it is imperative that the Bank continue with the current monetary easing, including yield curve management,” the report said.

The Japanese CPI value for February slowed from a 42-year high to 3.3%.

— Lee Ying Shan

The Monetary Authority of Singapore (MAS) said on Monday that UBS’s acquisition of troubled rival Credit Suisse is not expected to affect the stability of Singapore’s banking system.

“MAS said today that Credit Suisse Group AG will continue to operate in Singapore without interruptions or restrictions, following the announced acquisition by UBS Group AG. Credit Suisse clients will continue to have full access to their accounts and Credit Suisse’s contracts with counterparties will continue to force. force,” said MAS, in a rack on Monday.

“The acquisition is not expected to have an impact on the stability of the banking system in Singapore,” said MAS.

MAS added that both banks do not serve retail clients as their primary business in Singapore is private banking and investment banking.

The Straits Times Index fell 0.58% in early trading. Shares of DBS Bank rose by 0.15% while OCBC Bank And UOB decreased by 0.49% and 0.18% respectively.

The People’s Bank of China left 1-year and 5-year loan prime rates unchanged after cutting its reserve requirement ratio for almost all banks with 0.25 percentage point last week.

The 1-year LPR remained at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since August last year.

The offshore Chinese yuan rose 0.14% to 6.8795, while the onshore Chinese yuan remained flat, trading at 6.885 against the US dollar.

— Lim Hui Jie

The Mid-Size Bank Coalition of America has asked regulators to guarantee all deposits for the next two years, according to a Bloomberg report.

The report cited a letter from MBCA in which the coalition argued that deposit insurance would halt rapid withdrawals from smaller banks and stabilize the banking sector.

MBCA suggested that the banks themselves fund the expanded insurance program by raising the rating of deposit insurance, the Bloomberg report said.

The coalition’s request comes after US Treasury Secretary Janet Yellen said not all depositors will be protected above the FDIC insurance limits of $250,000 per account, despite the FDIC securing all deposits for Silicon Valley Bank and Signature Bank.

— Yeo Boon Ping

The tech sector was a bright spot last week as the banking crisis rocked markets.

But is it time to buy into the rally? Market pros are urging caution, but believe some stocks will outperform.

CNBC Pro subscribers can read more here.

— Weizhen Tan

The US Federal Reserve has joined five other central banks jointly announced to increase the frequency of their US dollar swap agreements from weekly to daily.

The five central banks are the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.

The frequency of 7-day trades will increase from March 20 from weekly to daily and continue until “at least” the end of April.

In doing so, monetary authorities said the move “would serve as an important liquidity backstop to ease tensions in global financing markets, thereby mitigating the effects of such tensions on lending to households and firms”.

The move comes ahead of the Fed’s two-day meeting this week announcing its intentions on interest rates.

—Lim Hui Jie, Jeff Cox

The opportunities in global electric cars are huge, and Bernstein estimates that the European market alone will be worth $300 billion by 2030.

While electric car manufacturers may be an obvious game, Wall Street analysts have cited a slew of stock picks across industries as a way to make money.

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— Zavier Ong

The FDIC has announced a deal to sell “substantially all deposits and certain loan portfolios” of signature bank to Flagstar Bank, a subsidiary of New York Community Bancorp.

The agency said Signature’s 40 former branches will begin operating under the Flagstar name on Monday.

The deal includes $38.4 billion in Signature assets, including $12.9 billion in loans purchased at a discount of $2.7 billion, according to the FDIC.

However, it said Flagstar’s offer did not include the approximately $4 billion in deposits associated with Signature’s digital banking business. The agency said it will provide those deposits directly to digital banking customers. The FDIC also said about $60 billion in loans will remain in receivership.

— Christine Wang

UBS entered into an agreement to buy its rival Swiss credit for $3.2 billion. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threat to the banking sector.

Credit Suisse saw its shares plummet last week after its largest investor, the Saudi National Bank, refused to provide additional financing. Despite subsequent action by Credit Suisse and Swiss regulators to allay investor fears — including a loan of up to 50 billion Swiss francs ($54 billion) — At the end of the week, shares plummeted 25.5%.

Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion in assets under management, according to UBS.

— Hakyung Kim

The Federal Reserve’s decision to raise rates by 25 basis points or not to raise rates at next week’s policy meeting may depend on what happens in the coming days, said Nick Timiraos, chief economics correspondent at The Wall Street Journal.

The Fed is expected to approve a rate hike of a quarter or 25 basis points at next week’s meeting. But market observers say the central bank’s next decision on interest rates has become less certain over the past week amid the banking crisis.

“I hear the same thing everyone is hearing, which is a plea to go for 25 and a plea to skip,” he said on CNBC’s “The Exchange.” “I think it really depends … on what happens with the state of the markets and this risk of financial instability in the coming days.”

—Alex Harring

Bank of the First Republic took another step lower during afternoon trading, falling more than 30% as investors positioned themselves in the last hour of trading this week. Friday’s nosedive has sent the stock more than 70% down from the start of the week.

The decline has also weighed on the SPDR S&P Regional Banking ETF (KRE)which fell 6% on Friday and was poised for a weekly loss of more than 14%.