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By Swissquote Analysts
Published on 28.06.2022
Morning news

Credit Suisse Found Guilty in Money-Laundering Case

Topic of the day

Credit Suisse Group AG and a former employee were found guilty Monday in a Swiss federal criminal court of helping a Bulgarian crime ring launder money related to cocaine trafficking. The court found Credit Suisse didn’t do enough to prevent money laundering by members of the crime ring, which prosecutors said moved tons of cocaine into Europe and washed millions of dollars through Credit Suisse. It fined Credit Suisse around $2.1 million and ordered it to pay around $20 million to the Swiss government. The former employee, who prosecutors said regularly accepted suitcases of cash from one of the ring members that went beyond allowed limits, was given a 20-month suspended sentence. A person from another bank and two members of the crime ring were also found guilty of money-laundering charges. Credit Suisse said it would appeal the decision. It noted that the alleged offenses date to more than 14 years ago. It had said it was astonished to be charged when prosecutors brought the case in December 2020. The bank on Monday said it is continually testing its anti-money-laundering framework and has been strengthening it over time. The conviction hits Credit Suisse as it tries to turn a corner on financial losses and other scandals, including more than $5 billion in losses related to the collapse of family office Archegos Capital Management.

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Swiss stocks

On Monday, the stock market in Switzerland extended Friday's strong gains. The SMI improved by 0.8 per cent to 10,907 points. Among the 20 SMI stocks, there were 11 price gainers and 9 price losers. 37.5 (previously: 45.47) million shares were traded. The shares of the index heavyweights Nestle, Novartis and Roche were among the strongest performers, adding between 0.8 and 1.8 per cent. ABB shares increased by 1.9 per cent. Credit Suisse shares were up 0.3 per cent. The bank reached a settlement with the US governor of West Virginia over debts related to the Greensill Capital collapse. The US politician's mining company Bluestone Resources had received loans from the now insolvent supply chain financier, which bundled most of those loans and sold them to investment funds managed by Credit Suisse. Bluestone Resources now agreed to the deal with Credit Suisse and other creditors to repay up to $320 million of the $850 million it was owed, according to the bank. About 81 percent of the money will go to Credit Suisse. Holcim shares lost 2.1 percent to 42.81 francs. Analysts at UBS lowered their rating to "neutral" from "buy" and cut their price target by 10 francs to 45 francs.

International markets


European stocks closed mixed on Monday, buoyed by data showing a slowing U.S. economy that in turn could limit the magnitude of Federal Reserve rate hikes. The Stoxx Europe 600 index rose 0.5% to 415.1 points. In Paris, the CAC 40 and the SBF 120 gave up 0.4% and 0.3%, respectively. In Frankfurt, the DAX 40 rose 0.5% and the FTSE 100 in London gained 0.7%. Pharmaceutical company Ipsen (-2.7%) announced the acquisition of US biopharmaceutical company Epizyme (+55.1% on Wall Street), which specialises in oncology, for an initial estimated amount of 247 million dollars (234 million euros). EssilorLuxottica (-2.2%), a manufacturer of corrective lenses and optical instruments, announced the death of its chairman and main shareholder, Leonardo Del Vecchio. In Milan, Mediobanca and Generali, in which the businessman was also a shareholder, gave up 2.2% and 3% respectively. Automotive supplier Faurecia (+3.9%) should benefit from a recovery in volumes in the second half of the year and a more favourable pricing environment, according to Jefferies, which raised its recommendation on the stock to "buy" from "hold", while confirming its target price of 28 euros. Dutch group Prosus (+15.7% in Amsterdam) intends to sell shares in Chinese technology giant Tencent (-1.6% in Hong Kong), of which it is the largest shareholder, to finance a share buyback programme.

United States

U.S. stocks slipped Monday, losing some momentum after rallying last week on easing expectations for the path of the Federal Reserve’s interest-rate increases. The S&P 500 lost early gains and closed down 11.63 points, or 0.3%, at 3900.11. The Dow Jones Industrial Average lost 62.42 points, or 0.2%, to 31438.26, while the technology-focused Nasdaq Composite Index retreated 83.07 points, or 0.7%, to 11524.55. Consumer stocks were some of the worst performers. Spirit Airlines shares lost $1.95, or 8%, to $22.57 after proxy advisory firm Institutional Shareholder Services recommended that the airline’s investors vote for a proposed merger with Frontier Airlines. Frontier on Friday sweetened its offer for Spirit, which has also received multiple offers from JetBlue Airways. Spirit’s shareholders are slated to vote on the offers at a special meeting on Thursday. Shares of oil-and-gas companies were a bright spot, with energy companies in the S&P 500 rising 2.8%. Futures for Brent crude, the global oil benchmark, gained 1.7% to $115.09 a barrel. U.S.-listed shares of Chinese firms also rallied. New York-listed shares of Yum China Holdings —which runs the KFC and Pizza Hut chains in mainland China—rose 4.9%, while U.S. shares of Alibaba were up 0.9%. Chinese internet search giant Baidu gained 2.6%. Epizyme (+55.1%), a biopharmaceutical company specialising in oncology, has reached an agreement with the French group Ipsen, which will launch a takeover bid at a price of $1.45 per share in cash, i.e. $247 million for the entire capital. The acquisition focuses on Epizyme's lead drug, Tazverik (tazemetostat), which has already been approved by US authorities for the treatment of certain follicular lymphomas, Ipsen said in a statement. Robinhood Markets shares jumped 14% to $9.1 after Bloomberg News reported that cryptocurrency trading platform FTX was considering a buyout of the trading app.


In Asia, major indexes closed mixed. In Tokyo, the Nikkei-225 added 0.2 per cent to 26,926 points, supported by auto and energy stocks. Shimamura gained 8.2 per cent after the retailer posted a 15 per cent jump in first-quarter earnings for the year. The Chinese stock markets are down - especially in Hong Kong (-0.9%), where the gains on the previous days had also been particularly lavish. In Seoul (+0.3%), rising stocks in the automotive, energy and biotechnology sectors provide support. Hanmi Semiconductor rallied by 1.5 per cent. The company announced that it would supply semiconductor equipment to an Infineon subsidiary.


Long-dated U.S. government debt yields rose for the second consecutive session after May durable goods orders came in better-than-expected. The 10-year Treasury note increased by 7 basis points to 3.205%. The 2-year Treasury note gained 4 basis points to 3.119%.


Jefferies reduces Fresenius target to EUR 30 (40) - Hold

Goldman Sachs raises Commerzbank target to EUR 12 (9.70)

Deutsche Bank cuts target Carl Zeiss Meditec to EUR 156 (210) - Buy

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