Much of the financial sector is suffering on Monday on the stock market.
The massive sale of shares by Archegos Capital Management, a US hedge fund in turmoil since last week, has hurt the values of banking institutions.
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After a warning of upcoming losses, Credit Suisse slumped 14.47% to 10.66 Swiss francs in Zurich around 11:00 GMT while Japanese bank Nomura closed the session down 16.33% at 603 yen in Tokyo.
The probable losses of these two establishments raise fears of a wider exposure to other banking groups.
Also struggling, the German Deutsche Bank plunged from 2.99% to 10.18 euros and the French BNP Paribas accused the biggest drop in the CAC 40 index, down 1.72% to 50.78 euros , followed by Société Générale (-1.69% to 21.87 euros).
Massive sale of blocks of shares
Archegos Capital Management, which manages the fortune of businessman Bill Hwang, last Friday offloaded massive stakes in US and Chinese companies listed on the New York Stock Exchange, the Bloomberg news agency reported. , citing sources familiar with the matter.
This block sale of shares of more than 20 billion dollars, unusual in its scale, was carried out in particular by the American investment banks Morgan Stanley and Goldman Sachs, according to the financial agency.
In particular, it concerns stocks of Chinese companies, such as internet giants Baidu Inc and Tencent Music Entertainment Group, online discount retailer Vipshop Holding as well as American companies, such as mass media conglomerates, ViacomCBS and Discovery, which plunged Friday on the stock market.
The investment company would have been jostled by the sharp drop earlier in the week of ViacomCBS, in which it held many shares, according to the British business daily Financial Times, which also quotes sources familiar with the matter.
This downturn led one of Archegos' brokers to request additional funds to cover the depreciation of this investment and
ultimately
prompted Archegos to liquidate some of its positions.
Fears of cascading reactions
The fund's woes have raised fears of chain reactions in the financial world.
On Monday, Nomura warned that an "
event
" on Friday March 26 "
could subject one of its subsidiaries in the US to a significant loss
" from transactions related to a customer based in the United States, without disclosing the name of the latter.
The Japanese bank is currently evaluating the potential loss, estimating for the moment that the setbacks related to this client could cost him $ 2 billion (1.6 billion euros) on the basis of prices on Friday.
The amount could be reassessed, she warned.
Already shaken by the bankruptcy of the British financial company Greensill, Credit Suisse has also issued a warning on its results.
For the moment, it is "
premature
" to quantify the exact size of the loss that could result from it, indicated the Swiss bank, estimating however that the setbacks of this fund could potentially have a "
highly significant and substantial
"
impact
on its results. of the first trimester.
Read also: After the bankruptcy of Greensill Capital, creditors claim billions
Like Nomura, the Swiss bank did not give the name of the fund, referring only to "
a significant hedge fund based in the United States
".
This potential loss is, however, linked to the woes of Archegos Capital Management, a person familiar with the matter told AFP.
Nomura's warning is also linked to the fund, a person familiar with the matter told Bloomberg.
"
While the Greensill issue is still far from being resolved, Credit Suisse is once again faced with another question,
" which could have repercussions "
on its results,
" responded Andreas Venditti, analyst at Vontobel, in a stock market commentary. , who expects that the woes of this fund and their impact on the big banks will make a lot of talk about them in "
the coming days
", even "
weeks
".
The question is whether the liquidation of the positions of this fund is likely to have systemic repercussions, that is to say likely to have repercussions on the entire financial system, for his part weighed Neil Wilson, chief economist for Markets.com.
“
I don't think it's systemic risk per se,
” he said, noting that Archegos had focused on a number of risky investments.
“
But when we look at this
”, after the GameStop saga or the shakes on Tesla, he took as an example, “
we see more and more pockets of very unusual brokerage activity on certain stocks
”, a- he warned.
Germany's leading bank Deutsche Bank did not comment. But, according to a financial source, its exposure to this fund is only a small fraction of that of other players in the banking sector.