Jarden Brief: Credit Suisse drama sends another shockwave across markets before signs of relief

Credit Suisse has had a rollercoaster ride, taking some other stocks and markets along on the turbulent journey. Photo / AP

Keeping you up to date with the latest market moves, in association with Investment firm Jarden.

International

US

Worldwide equities were higher this morning following a tumultuous previous trading session.

Major investment bank Credit Suisse fell 24 per cent (+19.2 per cent at the time of writing) after the bank’s largest depositor, Saudi National Bank, said it wouldn’t be providing any additional funding if the Swiss bank was to look to raise capital.

That compounded fears which originated when the company’s auditor two days earlier identified “material weaknesses” in Credit Suisse’s financial reporting controls.

This sent another shockwave across not only the global banking system but all listed entities in general.

Easing concern was the Swiss regulator FINWA confirming it would provide liquidity to Credit Suisse if the bank was to require additional funding to remain operational.

An update to this series indicated Credit Suisse could borrow up to, and in excess of US$50 billion from the Swiss National Bank to fund a short term liquidity facility.

Other news included rumours TikTok could be banned in the US if its owner ByteDance is unable to comply with US regulations.

New Zealand 

The New Zealand market traded lower early in the day and in line with global equity weakness overnight but rebounded by the end of trading to land on a 0.7 per cent gain.

Stats NZ released GDP data for the 4th quarter of 2022, with a 0.6 per cent decline in growth following a 1.7 per cent expansion in the September quarter and taking the annualised number to 2.4 per cent.

Nine out of the 16 industries Stats NZ follows posted a decline in the quarter, pushed even lower by the manufacturing sector’s contribution of -1.7 per cent.

Other information included household spending holding flat, a fall in overall Government spending, and a 3.3 per cent increase in business services spend.

Early signs of a cooling economy could contribute to an overall reduction in currently elevated levels of inflation, with the RBNZ keeping a keen eye on this release and SVB saga out of the US, among many other key indicators before making any change to the official cash rate at the next meeting in April.

Fonterra Shareholders’ Fund (the listed entity representing New Zealand’s largest farming conglomerate) posted an impressive half year result, with shareholders reacting positively to lift the stock up 8.5 per cent to $3.30.

Positive sentiment surrounding the stock was likely buoyed by an upgrade to FY23 earnings guidance from 50-70 cents per share (cps) to 55-75cps, plus, commenting it was likely to return somewhere in the region of $800m (50cps) to shareholders following a successful sale of its Brazilian and Chile dairy assets in FY23 or 24.

In another update to the ongoing Pegasus Bidco Limited proposed takeover of NZX listed tech company Pushpay Holdings, a revised offer was released to the market early on in the day’s trading.

The offer, which was upgraded from NZ$1.34 per share to NZ$1.42 per share, was said to have swayed six large shareholders, who accumulatively hold 18.6 per cent of the company and who voted no on the original offer, to change stance.

This development will likely get the deal across the line, with PPH then being taken private to no longer trade on the NZX.

With probability of deal success at $1.42 now likely, PPH stock traded up 13 per cent higher to $1.39.

Australia 

Australian shares moved lower in what was a tough day, and a tough week for Australian equities.

The financials sector fell more than 2.0 per cent in early trading, while the S&P/ASX20 represented by many of the large cap big four banks, was also down roughly 2.0 per cent at midday.

Against the run of play, equities representing exposures to safe haven assets like gold and other precious metals rose in value. At the close, the majority of the top 10 stocks to make gains during the day were mining and resource-related.

Macroeconomic data came in the form of an unemployment release which lowered to 3.5 per cent (from 3.7 per cent) in February, slightly below consensus estimates for 3.6 per cent. This indicates a tighter than expected labour market which has showed limited signs of cooling since the onset of interest rate increases last year.

For more information on the latest market moves, get in touch with Jarden.

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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.