1) FSS expected short recovery as crisis in banking system relaxed
Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in a sideways trend to sideways-up trend with a short recovery after some breathing room in the U.S. and European banking system situation as UBS settled the deal to takeover Credit Suisse.
The analyst recommended investors to monitor the Fed’s meeting on March 21-22 for the rate policy.
2) UBS buys Credit Suisse with the help of Swiss National Bank
UBS on Sunday agreed to purchase Credit Suisse for 3 billion Swiss francs (approx. $3.2 billion) in a move to rescue the embattled Swiss bank.
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.
3) Global central banks take action to enhance the provision of US dollar liquidity
The U.S. Federal Reserve, the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank announced a joint cooperation on Sunday to boost the provision of liquidity through the standing U.S. dollar swap line arrangements.
The central banks currently offering US dollar operations agreed to increase the frequency of 7-day maturity operations from weekly to daily. These daily operations will commence on March 20 and will continue at least through the end of April.
