Credit Suisse Warns of $500 Million Hit From Billionaire’s Lawsuit
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Credit Suisse is expected to pay around $500 million after losing a lawsuit brought by a Georgian billionaire who claimed the bank mismanaged his money. Credit Suisse has spent years fending off claims from Bidzina Ivanishvili, a former prime minister of Georgia. He sued the bank in Bermuda and Singapore for breach of trust, alleging he lost $800 million on forged trades made by his Geneva-based private banker, Patrice Lescaudron. Mr. Ivanishvili sought $400 million damages in Bermuda’s Supreme Court, where a five-week trial ended in December. In a statement Wednesday, Credit Suisse said a judgment against the bank was expected shortly in Bermuda for potentially more than $500 million. A person familiar with the matter said the judgment stems from Mr. Ivanishvili’s lawsuit. Mr. Lescaudron was sentenced in Switzerland to five years in prison in 2018 for fraud and forgery. The bank said it will consider whether further reserves are needed in its first-quarter results due on April 27. Credit Suisse securities slipped by 0.7 per cent.
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The Swiss central bank SNB refrained from changing its monetary policy on Thursday. The deposit rate remained unchanged at minus 0.75 per cent. However, the inflation forecast was more than doubled to 2.1 per cent for the current year. In December, the expectation had still been 1.0 per cent. The central bank is continuing to keep its options open for intervening in the foreign exchange market but is predicting that the economy will keep recovering - despite the war in Ukraine. The franc gained slightly after the SNB decision. The US dollar fell to 0.9312 francs after exchange rates reached a high of 0.9349. The SMI improved by 0.3 per cent to 12,130 points. Among the 20 SMI stocks, there were 12 losers and eight gainers. 36.56 (previously: 29.64) million shares were traded. Zur Rose shares fell by 12.7 per cent. Despite strong growth, the mail-order pharmacy significantly increased its losses last year. The company continued to hang on the introduction of the e-prescription in Germany, participants said. Novartis, on the other hand, gained 0.7 per cent. The US health authority FDA has given the pharmaceutical company the green light for its drug Pluvicto to treat a certain form of prostate cancer.
European markets traded mostly lower as traders’ eye economic data and ongoing geopolitical tensions. The Stoxx Europe 600 index fell 0.2 percent to 453.1 points. The CAC 40 and SBF 120 were down 0.4% each. In Frankfurt, the DAX 40 gave up 0.1% while the FTSE 100 gained 0.1% in London. Renault (-0.8%) announced the suspension of activities at its Moscow site. Virbac fell by 9.1%. The veterinary laboratory expects its organic growth to slow down in 2022, from 18.4% in 2021 to between 5% and 8%. Trigano (-6.6%) reported a turnover of 707.4 million euros for the second quarter of the year ending August 2022. Engie (-1.5%) announced its intention to sell about 8% of the capital of the manufacturer of membranes for the transport of liquefied natural gas Gaztransport & Technigaz (-1.8%). CGG (+0.9%) announced that it has been selected by PXGEO for the imaging of a seismic survey of the Sapinhoá field in the Santos basin, offshore Brazil. In Frankfurt, Daimler Truck (+7.1%) announced that it had achieved its targets for 2021, thanks to the market recovery and cost-cutting measures. The German truck manufacturer expects a further improvement in sales this year, despite supply problems.
U.S. stocks rose Thursday, with Wall Street indexes recouping most of Wednesday’s losses, led by gains among semiconductor and materials stocks. The S&P 500 rose 63.92 points, or 1.4%, to 4520.16, the technology-focused Nasdaq Composite Index climbed 269.23 points, or 1.9%, to 14191.84, and the Dow Jones Industrial Average gained 349.44 points, or 1%, to 34707.94. All three indexes declined in the previous session as concerns about rising energy prices and supply shortages again rattled investors. All 11 sectors in the S&P 500 rose. The tech segment climbed 2.7%, followed by materials with a 2% gain. Energy, by far 2022’s best performing sector, was the worst performing group on Thursday but still managed to eke out a 0.1% gain. Stocks have come under pressure this year amid rising inflation, mixed economic signals, the war in Ukraine and the continuing disruptions from the pandemic. The S&P 500 is down 5.2% in 2022, while the Nasdaq, off 9.3%, is in its longest bear market since 2008. That slump, however, comes on the back of a long rally. Wednesday marked the two-year anniversary of the stock market’s pandemic lows. Since then, the S&P 500 and Nasdaq have doubled, while the Dow is up nearly 90%. Among individual stocks, shares of Nikola rose 52 cents, or 5.7%, to $9.66 after the company confirmed that production has begun on its electric commercial truck, the Tre. Uber gained $1.64, or 5%, to $34.70 after saying it would list all New York City taxis on its app. In the semiconductor industry, Nvidia rose $25.16, or 9.8%, to $281.50 and Intel rose $3.35, or 6.9%, to $51.62, its biggest one-day gain since January 2021, as investors bet booming demand for chips would overwhelm short-term logistics issues.
As the week draws to a close, the stock markets in East Asia end up mostly lower. The composite index in Shanghai loses 0.6 per cent. The downward trend is even more pronounced in Hong Kong (-2.1%). The technology sector slumped by a good 4 per cent. Among the individual stocks, JD.com fell by 4.7 per cent. Netease fell by 4.2 per cent. The Japanese stock market (+0.1%) holds up well. In Seoul (+0.1%), inflation and supply chain issues dampen sentiment. The latest test of an intercontinental ballistic missile by North Korea stokes additional fears of geopolitical risks.
Long-dated U.S. government debt yields mostly rose on Thursday, with the 2- and 10-year rates at some of their highest levels of the year, as the U.S. unveiled new sanctions against Russia and investors continued to assess remarks by Federal Reserve officials on the need for further rate increases. The ten-year US Treasury yield increased by almost 7 basis points to 2.360%. The two-year yield rose by 3 basis points to 2.135%.
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