Asia-Pacific markets fall on banking fears, Credit Suisse announces ‘decisive action’ to lend

Forcing ByteDance to sell its shares in TikTok will not ease the security concerns, a TikTok spokesperson told NBC News.

The comments came in response to a Wall Street Journal report that says the US government is threatening ByteDance to divest its shares in TikTok or face a possible ban on the app.

“If the goal is to protect national security, the divestiture does not solve the problem: a change in ownership will not impose any new restrictions on data flows or access,” the spokesman said, according to NBC.

“The best way to address national security concerns is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, control and verification that we already implement,” the spokesman said.

– Valeriya Antonshchuk, Jihye Lee

The China Securities Regulatory Commission has paused approvals of new global depositary receipts, Bloomberg reported, citing people familiar with the matter.

The regulator’s pause comes from concerns that GDR sales could pressure mainland-listed stocks – citing Chinese investors who later stashed the securities for shares in China to take advantage of price differences, the report added.

China’s regulators are considering new rules for the offerings, Bloomberg reported.

– Jihye Lee

Regulators at the US Federal Deposit Insurance Corporation have asked banks interested in acquiring shuttered banks Silicon Valley Bank and Signature Bank to submit bids by March 17, Reuters reported.

The FDIC aims to sell both SVB and Signature in their entirety, while offers for parts of the banks could be considered if the sale of the entire company does not happen, Reuters said, citing people familiar with the matter.

This will be the FDIC’s second attempt to sell SVB after a failed effort on Sunday.

Any buyer of Signature must agree to divest all crypto business at the bank, the two sources cited by Reuters added.

— Lim Hui Jie

New Zealand’s gross domestic product fell 0.6% in the quarter ending December 2022, a reversal from a 1.7% increase in the previous quarter.

For the full year 2022, GDP grew by 2.2%, down from the 6% recorded for the full year 2021.

Out of 16 industries, only five registered an increase in activity compared to the previous quarter.

Manufacturing was the biggest driver of the decline, down 1.9%.

— Lim Hui Jie

The Swiss franc continued to see volatility following developments around Credit Suisse – last strengthening 0.17% against the US dollar to offset earlier weakness after the lender announced it would borrow nearly $54 billion from the Swiss National Bank.

The Japanese yen also saw further strength to trade at 132.86 against the dollar. The Korean won strengthened 0.13% to 1,311.24 against the US dollar.

– Jihye Lee

Credit Suisse announced it will borrow up to 50 billion Swiss francs ($53.69 billion) from the Swiss National Bank under a secured credit facility and a short-term liquidity facility.

The moves will “support Credit Suisse’s core businesses and customers as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around customer needs,” the company said in a statement.

In addition, the bank is making a cash purchase offer in relation to ten US dollar-denominated senior debt certificates for a total consideration of up to $2.5 billion – as well as a separate offer for four euro-denominated senior debt certificates for up to a total of 500 million euros, the company states.

Read more here.

– Jihye Lee

Banks in South Korea and Australia reversed earlier losses after Swiss lender Credit Suisse announced liquidity measures to ease investor fears.

Commonwealth Bank of Australia pared most of its losses in volatile trade – it traded 0.15% lower after falling as much as 1.97% earlier.

Westpac Banking and National Australia Bank fell as much as 2.35% and 1.81% respectively, before erasing some of its declines to finally settle 1.34% and 0.58% lower.

Some South Korean banks fell as much as 2% earlier – Woori Financial Group last fell 1.62%, Shinhan Finance traded 1.69% lower and KB Kookmin Bank shed 1.12%.

— Lim Hui Jie

Japanese banks pared some losses on Thursday morning after Credit Suisse said it will “preemptively strengthen its liquidity position” by borrowing CHF50bn. .

Before the announcement, shares of MUFG fell more than 5% and were the biggest losers on the Topix, but have fallen to just a 3.35% loss, while Sumitomo Mitsui Financial Group fell 5% and has since fallen back to a 3.59% decline.

The Topix as a whole was down over 2% before the announcement, but is now slightly down 1.4%.

— Lim Hui Jie

Australia’s unemployment rate fell slightly from 3.7% in January to 3.5% in February, seasonally adjusted government data showed.

That was lower than expectations for an unemployment rate of 3.6%, according to a Reuters poll.

The economy’s employment rate was in line with expectations at 66.6%, up from 66.5% in the previous month.

The Australian dollar strengthened slightly by 0.23% to 0.6630 against the US dollar.

Japan’s trade deficit widened to 897.7 billion yen ($6.76 million) in February, up 26.2% from the same period a year ago.

According to government data, exports rose 6.5% in February, while imports rose 8.3%. These were lower than forecasts made by economists, who expected export and import growth of 7.1% and 12.2% respectively.

In particular, Japan’s exports to Europe and the US grew by 18.6% and 14.9% year-on-year respectively, while exports to China fell by 10.9%.

— Lim Hui Jie

Japan’s shunto wage negotiations were concluded on Wednesday, Reuters reported – marking the biggest wage increases not seen in decades as inflation levels rise.

Analysts polled by Reuters had expected to see a boost of about 3% in overall wages for the economy, the biggest increase since 1997.

Prime Minister Fumio Kishida has called for better wages for workers in Japan, citing a weakened currency and higher levels of commodity prices leading to increased import costs in a general environment of high inflation, the report said.

– Jihye Lee

First Republic Bank is considering options to shore up liquidity, including a sale of the lender, Bloomberg reported, citing people with knowledge of the matter.

The bank is expected to draw interest from its rivals and no decision has been made, the report said.

The bank’s shares rose 3.92% in after-hours trading in the US on Wednesday evening – after seeing a rise of more than 20% earlier in the week along with regional banks.

Goldman Sachs on Wednesday cut its economic growth forecast for 2023 by 0.3 percentage point to 1.2%, citing a pullback in lending by small and medium-sized banks amid turmoil in the broader financial system.

Analysts expect small banks to try to preserve liquidity in case they have to meet depositor withdrawals, leading to a significant tightening of bank lending standards that could weigh on aggregate demand. “Small and medium-sized banks play an important role in the U.S. economy,” they wrote.

Banks with less than $250 billion in assets make up about 50% of U.S. commercial and industrial lending, the firm noted. Click here to read more.

—Pia Singh

The Swiss National Bank said on Wednesday it will provide banking giant Credit Suisse with liquidity if needed.

In a joint statement, the SNB and the Swiss Financial Market Supervisory Authority said: “FINMA confirms that Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks. In addition, the SNB will provide liquidity to the globally active bank if needed.”

Credit Suisse shares were under pressure on Wednesday after the bank’s biggest investor said it would not provide more financial assistance. US-listed shares of Credit Suisse were last down more than 18%.

— Fred Imbert

Credit Suisse shares fell more than 23% on heavy volume as the market opened. Shares fell to a new record low of $1.75.

Problems at the Swiss bank have revived jitters among financial stocks, with particular pressure on mid-sized US banks. The bank’s largest investor, Saudi National Bank, said it cannot provide the company with additional financial assistance.

—Christina Cheddar Berk

ADR shares in Swiss lender Credit Suisse fell 21% in premarket trading.

Saudi National Bank said it could not provide more financing, Reuters reported. “We can’t because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Wednesday.

The troubled Swiss bank said earlier this week it had found “material weaknesses” in its financial reporting for 2022 and 2021.

– John Melloy

Several European bank names were halted on Wednesday as a sharp drop in Credit Suisse shares dragged down the sector – along with the broader market.

Shares in Societe Generale, along with Italy’s Monte dei Paschi and UniCredit, have been halted. Credit Suisse, meanwhile, fell 20% after its biggest investor said it would not provide further assistance to the troubled bank.

The moves come as traders around the world grapple with the fallout from Silicon Valley Bank’s failure.

“The failure of Silicon Valley Bank has spilled over into the European stock market,” wrote Citi strategist Beata Manthey. “While the US authorities have stepped in to limit the risk of contagion, the ongoing volatility in banking stocks means that wider spillovers may still be in play.”

Manthey noted that conditions were already ripe for profit-taking in European markets. “However, investors remain net long on European banks, despite cutting their position from max longs only a month ago. This means positioning can still relax further.”

— Fred Imbert, Michael Bloom