Shares in Asian markets largely fell on Monday after UBS agreed to purchase Credit Suisse for $3.2 billion in a move to rescue the embattled Swiss bank over the weekend.
As of 9.22 A.M. Bangkok time, the Hang Seng index in Hong Kong dropped 1.70%, dragged down by consumer cyclical stocks.
In mainland China, the Shanghai Composite was up 0.35%. China has maintained its prime rate for one-year loans at 3.65% and its prime rate for five-year loans at 4.3%.
In Australia, the S&P/ASX 200 lost 0.67%, while Japan’s Nikkei 225 was 0.66%.
South Korea’s Kospi dropped 0.14%.
U.S. stocks ended a volatile week on a down note on Friday as investors sold First Republic and other bank shares on continued worries about the health of the U.S. banking sector.
The Dow Jones Industrial Average fell 1.19 points, the S&P 500 dropped 1.10 points, and the Nasdaq Composite lost 0.74 points.
UBS on Sunday agreed to purchase Credit Suisse for 3 billion Swiss francs (approx. $3.2 billion). The deal will result in every shareholder of Credit Suisse receiving one UBS share for every 22.48 Credit Suisse shares they held.
After the purchase, the combined bank will have $5 trillion of invested assets.
The deal was largely supported by the Swiss National Bank that pledged a loan of up to 100 billion Swiss francs ($108 billion) to support the takeover. More importantly, the central bank also granted a guarantee to assume losses up to 9 billion Swiss francs from certain assets over a preset threshold in order to reduce any risks for UBS.
