Credit Suisse rescue eases market jitters

European shares rise as UBS agrees to take over rival

European stock markets swung wildly on Monday before closing up as investors weighed UBS’s takeover of troubled rival Credit Suisse. Big mining names led a rally in the second half of the day, ultimately boosting markets following a poor morning.


Irish shares endured a “crazy” day with big swings in both directions, dealers said. “There was weakness in the morning but a big turnaround in the afternoon,” one remarked.

Volatility buffeted the banks more than any other sector. AIB ended the day 6 per cent up at €3.756 after sliding as much as 5 per cent from Friday’s close earlier. Its peer Bank of Ireland gained 3.46 per cent to €9.258 after similar moves, although dealers said it did not finish as strongly as AIB. Permanent TSB added 2.5 per cent to €2.45.

Among leading Irish stocks, building materials multinational CRH was up 2.39 per cent at €46.03, while betting giant Flutter climbed 1.32 per cent to €157.45.


By 4.30pm food ingredients giant Kerry had risen 1.29 per cent to €91.36, while packaging manufacturer Smurfit Kappa was up 2.73 per cent at €33.06.

Ryanair had added 2.72 per cent to €14.375 around the same time. Dealers noted that airlines performed well on Monday.


Miners led Europe’s recovery on Monday, boosting London’s blue chip FTSE-100 where many of them are listed in the process. Chilean copper miner Antofagasta was up 4.09 per cent at 1,503 pence sterling just ahead of the close. Anglo American rose 4.87 per cent to 2,626p.

Glencore gained 3.86 per cent to 449.35p after analysts at Bank of America and UBS upgraded the stock.

HSBC was down 0.07 per cent at 541.7p, but had traded as high as 544.6p earlier in the day. Standard Chartered was 3 per cent off at 6.15pm just as the market closed, having hit a high of 619p earlier.

Aer Lingus and British Airways-owner International Consolidated Airlines’ Group climbed 3.3 per cent to 137.66p.


Credit Suisse shares plunged 55.7 per cent to 0.82 Swiss francs (83 cent) following news that UBS planned to buy the bank for around $3.2 billion.

Meanwhile, UBS travelled the opposite direction, climbing 1.26 per cent to 17.32 francs, as investors endorsed chairman Colm Kelleher’s remarks that the deal was good for the buyer’s shareholders but an “emergency rescue” for Credit Suisse.

Deutsche Bank stock slipped 0.5 per cent to €9.29. Societe General shares were also marginally down at €21.02.

Dealers said investors were weighing whether Credit Suisse’s problems were isolated or the tip of the iceberg. “The verdict seems to be that people are reasonably happy with the way things worked out,” said one.

Credit Suisse’s ongoing problems combined with the failure of two US lenders this month frayed investors’ nerves.The 3 billion franc price that UBS is paying is a 60 per cent discount on Credit Suisse’s Friday closing price.

Shares in Tara Mines-owner, Sweden’s Boliden AB, advanced 3.86 per cent to close at 396.6 kroner.


US shares nudged up as optimism that investors have swerved another banking crisis grew on Wall Street. The Dow Jones Industrial Average was up more than 1 per cent in early trade, while the S&P 500 rose at a similar pace.

Regional lenders clawed back losses sparked by last week’s collapse of Silicon Valley Bank. However, reports indicated that investors believe US regulators may have to take yet more action to shore up confidence in the sector.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas