Asian Markets, Silicon Valley Bank, Crypto

8 minutes ago

Government Intervention in Silicon Valley Banks Not Bailouts: Pershing Square’s Ackman

According to Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management, the US government’s intervention in the Silicon Valley bank collapse was “not a bailout”.

In a tweet, Ackman explained that in this incident, mainly shareholders and bondholders of the banks will be affected, and the losses will be absorbed by the insurance fund of the Federal Deposit Insurance Corporation.

This is in contrast to the 2008 financial crisis, where the US government pumped taxpayer money into banks in the form of preferred stock, and bondholders were protected.

“Many who returned suffered no consequences. They were bailouts,” Ackman wrote.

In this case, “returnees will bear the consequences. Investors who do not adequately supervise their banks will get zero exits and bondholders will suffer a similar fate,” he added.

Had regulators not intervened, Ackman opined, “the bank run of the 1930s would have continued since Monday, causing massive economic damage and hardship for millions.”

– Lim Hui Jee

2 hours ago

SM Entertainment shares fall nearly 20% after Hype abandons takeover bid

Shares in South Korean entertainment company SM Entertainment fell nearly 20% after rival Hype announced over the weekend that it was withdrawing its takeover bid.

In a statement on SundayHybe – the company behind K-pop BTS – said it made the decision “after noticing that the market was showing signs of overheating due to competition from both Kakao and Kakao Entertainment”.

“This acquisition, along with the tender offer, could affect shareholder value in decision-making and overheat the market.”

This is the latest move in a public war between Kakao and Haibei over SM Entertainment that began in February.

Meanwhile, Hype shares were up 1.91% on Monday morning, and Kago shares were up 1.38%.

– Lim Hui Jee

An hour ago

Goldman Sachs no longer sees a case for the Fed to raise rates in March

Goldman Sachs doesn’t see a case for the Federal Reserve to raise interest rates at next week’s Federal Open Market Committee meeting, economist John Hutchius said in a note on Sunday.

“In light of the pressure on the banking system, we do not expect the FOMC to offer a rate hike at its next meeting on March 22,” Goldman Sachs said in a note.

Hatzius and a panel of economists said they expect to see 25 basis point hikes in May, June and July, reiterating a terminal rate expectation of 5.25% to 5.5%.

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– Jihye Lee

An hour ago

Moody’s says the SVB will not be affected by the downturn because Asian banks’ deposits are in debt

Asian banks will not be affected by the collapse of Silicon Valley banks because most of their deposits are in loans — not Treasuries, according to Moody’s Investors Service.

“If you look at the deposit ratio for conventional debt in Asia, it’s about 90%, so most of the deposits are invested in loans,” Moody’s Vice President Eugene Darzimanov told CNBC’s “Squawk Box Asia.”

“Banks are obviously investing in government bonds – local bonds, foreign bonds, but the share is not that significant.”

Darzimanov also noted that Asian banks are resilient due to their “strong capital, good quality loan books and, most importantly, good funding and liquidity”.

– Sumathi Bala

3 hours before

Silicon Valley Bank’s China venture says balance sheet ‘independent’

The Chinese joint venture of shuttered bank Silicon Valley Bank said last week that its operations were “independent and stable” amid the collapse of its US parent.

SPD Silicon Valley Bank is a 50-50 joint venture between Silicon Valley Bank and Shanghai Pudong Development Bank.

In a statement on its website, the bank said it had “always operated sustainably, in compliance with Chinese laws and regulations, with a sound management structure and independent balance sheet.”

“As China’s first technology bank, SPD Silicon Valley is committed to serving Chinese science and technology enterprises, and always adheres to Chinese regulations for sustainable operations,” the bank added.

– Lim Hui Jee

3 hours before

Biden tweets regulators reached ‘fix’ to protect US financial system

President Joe Biden tweeted that U.S. regulators have reached a “settlement” over issues related to Silicon Valley Bank and Signature Bank.

“The American people and American businesses can trust that their bank deposits will be there when they need them,” he said in a Twitter thread.

“I am committed to holding those responsible for this mess fully accountable and continuing our efforts to strengthen oversight and regulation of the big banks so we are never in this position again,” Biden wrote in a tweet.

– Jihye Lee

2 hours ago

CNBC Pro: Barclays says shares of this little-known global chip company could rise 50%

2 hours ago

CNBC Pro: ‘Unprecedented Growth’: Citi Now Reveals Its 4 Best Holdings in Renewables

Citi said the world is undergoing “rapid and transformative change” when it comes to energy, naming four buy-rated stocks as “top picks” in the space.

CNBC Pro subscribers can read more here.

– Weissen Don

3 hours before

Silicon Valley bank collapse won’t hurt Asian growth outlook: Goldman Sachs

Andrew Tilton, chief Asia-Pacific economist at Goldman Sachs, said the region’s economic outlook was unlikely to be affected by the fallout from the collapse of Silicon Valley Bank.

“As this is relatively quickly addressed by regulators and does not spread to additional companies beyond what has been mentioned so far, we are unlikely to see a significant impact on the Asian growth outlook,” Tilton told CNBC. “Squawk Box Asia.”

He reiterated the company’s forecast for China’s economy and stressed that it would be largely driven by the reopening after the zero-Covid policy.

“We continue to expect 5.5% growth for China this year, driven largely by reopening and less sensitive to this particular issue,” Tilton said.

– Jihye Lee

4 hours ago

Dick Bowe says depositors have lost faith in US banks

Senior banking analyst Dick Bowe said U.S. banks have lost credibility with average investors because of what he described as “accounting tricks,” he told CNBC’s “Squawk Box Asia.”

“A bank account in America is junk,” he said. “Banks are using accounting gimmicks to avoid specifying what is the real stake in these banks,” he added.

Bowe also noted that the problems surrounding the collapse of Silicon Valley Bank were led by federal direct loans.

“They have $110 billion invested in US government-backed securities, Treasuries, mortgage-backed securities,” he said. “It wasn’t the loans that created the problem, it was the US-backed bonds that created the problem.”

– Jihye Lee

5 hours ago

Regulatory backlog for SVB failure aimed at protecting economy, officials say

Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and FDIC Chairman Martin J. Grunberg released a joint statement Sunday night. They explained the rationale behind the plan to protect financial institutions with money in Silicon Valley banking and bail out depositors.

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“We are taking decisive action to protect the American economy by strengthening public confidence in our banking system,” the statement said. “This action will ensure the U.S. banking system continues to play its vital roles in protecting deposits and providing households and businesses with access to credit in a way that promotes strong and sustainable economic growth.”

Silicon Valley Bank failed on Friday, marking the biggest bank failure since the 2008 financial crisis. This has raised concerns over other banks that may see similar risks.

“The U.S. banking system remains on solid footing, and reforms enacted after the financial crisis have ensured better security for the banking sector,” officials said in a statement.

“Those reforms, combined with today’s actions, demonstrate our commitment to taking the necessary steps to ensure depositors’ savings are safe.” They added.

– Fred Imbert

5 hours ago

Even after Signature Bank shuts down, cryptocurrencies rise with stock futures

Crypto rose along with stocks as US regulators unveiled a plan to ensure depositors at a Silicon Valley bank get their money after the bank’s shock collapse on Friday.

Bitcoin and Ether were each up about 7% after 6:30 p.m., according to Coin Metrics.

The moves came even as New York’s Signature Bank was shut down Sunday by the New York State Department of Financial Services, according to a joint statement from the Treasury, Federal Reserve and FDIC.

Signature Bank is another popular crypto-friendly company, and the next largest to Silvergate, which announced its impending liquidation last week.

Its closure raises fears among crypto investors and entrepreneurs that the industry is de-risking the US banking system, which would allow it to move into crypto assets without “on-ramps”. Silvergate and Signature Crypto have helped solve this problem by creating easier banking services and payment platforms for companies.

Wall Street analysts maintained buy ratings on Signature Bank on Friday, despite bad news about its peers earlier in the week.

– Tanaya Machel

5 hours ago

Futures rose after regulators announced a freeze on SVB depositors

Futures extended their gains as early as 6:30 p.m. ET after U.S. regulators unveiled a plan to limit damage from the collapse of Silicon Valley banks.

Dow futures were last up 297 points, or 0.9%. S&P 500 futures rose 1.1% and Nasdaq Composite futures advanced 1.2%.

– Tanaya Machel

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