The fear of contagion effects in view of the troubled Credit Suisse is weighing on the share prices of major European banks in particular. At the beginning of the week, Deutsche Bank's shares temporarily fell by more than 7 percent in price, those of Commerzbank by a good 5 percent. Later, the price reductions were reduced somewhat. The Dax started Monday trading with a slight minus. In the morning, the German selection index lost 0.8 percent to 14,650 points. After the takeover by UBS, Credit Suisse's share price fell by 64 percent at times, later down 57 percent. UBS shares themselves temporarily lost 11 percent on the stock exchange. The Swiss stock index SMI fell by 1.6 percent.
Security, on the other hand, was sought by investors. And so German government bonds started the week on Monday with strong price gains. The trend-setting futures contract Euro-Bund-Future rose sharply by 1.07 percent to 139.44 points in the morning. Conversely, the yield on ten-year German government bonds fell below the 2 percent mark. Most recently, the securities returned 1.98 percent. Other government bonds in the euro area were also in demand.
"The stock markets are trying to evaluate and praise the rescue of Credit Suisse," said portfolio manager Thomas Altmann of asset manager QC Partners. On the positive side, it is quite clear that the authorities are doing everything they can to help banks like Credit Suisse and secure deposits. On the other hand, investors would see how quickly shares of distressed banks could become almost completely worthless.
"French banks are solid"
After the rescue operation for Credit Suisse, France's central bank governor Francois Villeroy de Galhau expressed confidence in the stability of French financial institutions. "To put it bluntly, French banks are solid," the member of the Governing Council of the European Central Bank (ECB) told Le Monde.
The French banking sector is concentrated around six major banks. These all have sound and profitable business models, strict risk control and a high degree of prudential compliance, Villeroy said. He added: "As far as Credit Suisse is concerned, this is a bank that has had problems with its business model and profitability for several years, as well as with inadequate internal controls." The Swiss authorities had acted well this weekend to bind the institute to UBS. This is a welcome solution.
The most important Asian stock markets fell on Monday. However, the losses were limited after it had already gone significantly downhill last week. The Japanese Nikkei 225 closed 1.4 percent lower at 26,946 points on Monday. The situation was similar for the Australian S&P ASX 200, which left trading down 1.4 percent at 6899 points. For the Hang Seng Index of the Chinese Special Administrative Region of Hong Kong, where foreign investors are also allowed to trade, it recently even fell by 3.37 percent to 18,861 points. The mood for the banks remains weak: The Hong Kong-listed shares of the bank HSBC lost more than 6.5 percent.
However, the CSI-300 index with the 300 most important stocks of the trading venues Shanghai and Shenzhen performed comparatively well, having already lost less than the other indices recently. It fell by only 0.50 percent to 3939 points. The stock market barometer benefited from the fact that the Chinese central bank surprisingly lowered the reserve requirement ratio for domestic banks on Friday.