FTSE rises as UBS appoints new CEO to oversee Credit Suisse acquisition Photo: Lam Yik/Reuters
The FTSE 100 and European stocks traded higher Wednesday as concerns about the global financial system eased after three high-profile bank failures.
The FTSE 100 (^FTSE) was up 0.36% to 7,511 points on the open, while the CAC 40 (^FCHI) was up 0.72% to 7,139 points in Paris. In Germany, the DAX (^GDAXI) rose 0.56% to 15,226.
UBS appoints new CEO to steer acquisition of Credit Suisse
UBS (UBS) has brought back Sergio Ermotti as chief executive to oversee the acquisition of Credit Suisse (CS).
Ermotti, who was CEO for nine years before stepping down in 2020, will start on April 5, UBS said on Wednesday.
The move comes less than two weeks after UBS agreed to acquire Credit Suisse in a £2.65 billion deal pushed through by Swiss authorities who feared a failure to protect depositors would trigger a global bank collapse.
“The task at hand is urgent and challenging,” said Ermotti. “In order to tackle them in a sustainable and successful way and in the interests of all parties involved, we must carefully and systematically examine all options.”
The challenge is to bring together two banks with $1.6 trillion in assets, more than 120,000 employees and a complex balance sheet.
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Victoria Scholar, Head of Investment at Interactive Investor, said: “Ermotti was previously Chief Executive of UBS from 2011 to 2020 and is currently Chairman of Swiss Re. Ralph Hamers, who has been at the helm since November 2020, is stepping down “in light of the new challenges and priorities for UBS”. Ermotti said: “The task at hand is urgent and challenging”.
“Ermotti has steered UBS through the aftermath of the 2008 global financial crisis and a fraudulent deals scandal and is a master at crisis management. He also helped UBS navigate the pandemic outbreak and associated market volatility for much of 2020.”
“The new CEO faces the immediate challenges of downsizing, downsizing Credit Suisse’s investment bank, finding other synergies between the two lenders and convincing shareholders of the prospects of the combined company.”
The story goes on
USA and Asia
Across the pond, S&P 500 futures (ES=F), Dow futures (YM=F), and Nasdaq futures (NQ=F) were all in the green as trading began in Europe.
Wall Street soured Tuesday as bond yields extended gains as investors eyed recent developments in the banking sector following the sale of Silicon Valley Bank.
The Dow Jones (^DJI) lost 0.12% to close at 32,394 points. The S&P 500 (^GSPC) slipped 0.16% to close at 3,971 points and the tech-heavy NASDAQ (^IXIC) fell 0.45% to 11,716.
As banks once again dominated the headlines this week, federal regulators were faced with intense questions from lawmakers on Tuesday about the collapse of SVB and Signature Bank. All three regulators agreed that financial regulations need to be tightened after the recent turmoil.
“My expectation is that capital and liquidity standards need to be strengthened for banks with over $100 billion,” Michael Barr, the Federal Reserve’s vice chairman for oversight, said at the Senate Banking Committee hearing, responding to the question from the Democrats Senator Elizabeth Warren.
In Asia, Tokyo’s Nikkei 225 (^N225) rose 1.33% to 27,385 points, while Hong Kong’s Hang Seng (^HSI) rose 1.79% to 20,138. The Shanghai Composite (000001.SS) lost ground, falling 0.21% to 3,238 points.
FTSE100
Back in London, UK high-street chain Next (NXT.L) has announced that it will hike prices at a slower pace in the coming year as it revealed better-than-expected full-year earnings.
The company said that revenue for the year to the end of January rose 8.4% to £5.1 billion, while pre-tax profit rose 5.7% to £870.4 million.
Profits were £10m above previous guidance and up 16.3 per cent year on year before the pandemic began.
“We now believe that price increases in the second half will be much lower than we originally feared,” it said.
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The group, which has hiked prices to offset rising cost pressures, said price inflation will be “softer” than previously thought, forecasting a 7% rise this Spring/Summer and a fall to 3% this Autumn/Winter .
pounds against dollars
The pound (GBPUSD=X) lost ground after a strong session on Tuesday. Against the dollar, the pound slipped 0.14% to trade towards $1.23.
The pound sterling (GBPEUR=X) was muted against the euro at €1.13.
oil markets
Meanwhile, Brent Crude (BZ=F) rose modestly to trade around $79/barrel, reflecting gains from the previous session on risks of supply disruptions from Iraqi Kurdistan and hopes that the turmoil in the banking sector has been contained. continued.
A weaker US dollar, making oil cheaper for international buyers, also pushed crude oil prices higher.
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