By Swissquote Analysts
Apollo in Talks to Take Stake in Credit Suisse Investment-Banking Unit
Topic of the day
Apollo Global Management is among a group of financial firms in talks to take a stake in Credit Suisse Group AG’s revamped investment bank, people familiar with the matter said. Credit Suisse said last year that it would carve out the advisory part of its investment-banking operation into a new entity under the resurrected CS First Boston brand following a string of scandals. The bank said it would raise outside capital to launch the new entity, which it hopes to list in a separate initial public offering eventually. The talks with Apollo are continuing and could fall still apart. An investment in CS First Boston would represent another level of commitment from Apollo, which had previously agreed to take over Credit Suisse’s securitized-products group, which packages and resells debt. The size of the potential stake couldn’t be learned. Credit Suisse said last year that it had secured $500 million from an unnamed investor, and Chairman Axel Lehmann said in December a few offers were on the table to help finance CS First Boston’s leveraged-finance business.
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After a flat start and a subsequent mild retreat, the Switzerland stock market saw a brief spell in positive territory Tuesday morning but faltered and spent the rest of the day's session in the red. Worries about a potential global recession hurt weighed on sentiment. The benchmark SMI ended with a loss of 49.38 points or 0.44% at 11,233.87. Sika drifted down 2.82% and Logitech ended 2.29% down. Nestle ended lower by 1.29%, while ABB and Alcon both ended lower by a little over 1%. Givaudan, Geberit, Richemont, Lonza Group and Partners Group also closed weak. Credit Suisse climbed 1.03%. Swisscom surged 0.71%, while Swiss Re and Holcim ended higher by 0.56% and 0.47%, respectively. In the Mid Price Index, AMS tanked more than 17%. Bachem Holding, Ems Chemie Holding, SGS, Adecco and Belimo Holding ended lower by 1 to 1.4%. Temenos Group rallied 5.74%. Tecan Group ended higher by 1.81%, while Galenica Sante, Helvetia, Baloise Holding and Swatch Group posted moderate gains. In economic news, a report from the State Secretariat for Economic Affairs said the Swiss unemployment rate edged up to a non-seasonally adjusted 2.2% in January 2023, from 2.1% in the previous month. The latest figure pointed to the highest reading since April 2022.
European stocks closed on a mixed note on Tuesday with investors largely making cautious moves amid concerns about slowing global economy, and geopolitical tensions. The pan European Stoxx 600 climbed 0.23%. The U.K.'s FTSE 100 gained 0.36%, while Germany's DAX and France's CAC 40 edged down 0.16% and 0.07%, respectively. Among other markets in Europe, Austria, Czech Republic, Denmark, Greece, Iceland, Norway, Poland and Portugal ended higher. Belgium, Ireland, Russia and Turkiye closed weak, while Finland, Netherlands, Spain and Sweden ended flat. In the UK market, BP surged nearly 8% after it posted a record annual profit, in line with increasing natural gas and oil sales from rising prices. Airtel Africa, BT Group, Shell, GSK, Standard Chartered, Beazley, HSBC Holdings, Natwest Group, Barclays, Lloyds Banking Group, Endeavour Mining and Persimmon gained 1 to 3.2%. Pearson, Melrose Industries, Compass Group, Rentokil Initial, Scottish Mortgage, RightMove, SAGE Group, Experian, Diageo, Coca-Cola HBC, M&G, Unilever, RS Group, Segro, IAG and Next lost 1 to 3%. In Paris, BNP Paribas shares climbed higher after the lender raised its 2025 targets and announced a 5 billion-euro share buyback program in 2023, despite posting a lower-than-expected profit in the fourth quarter. Renault, TotalEnergies, BNP Paribas, Sanofi, Societe Generale, Publicis Groupe and Credit Agricole ended with sharp to moderate gains. Carrefour ended 4.7% down. Eurofins Scientific and Airbus closed lower by about 4% and 3%, respectively. Perond Ricard, Hermes International, L'Oreal, Engie, Saint Gobain, LVMH, Safran and Essilor lost 1 to 2.2%. In the German market, Continental surged more than 2.5% and Linde climbed about 2.3%. Deutsche Bank, Bayer and Siemens Healthineers gained 1.2 to 1.5%. Shares of software provider TeamViewer soared nearly 18% after the company launched a share buyback and announced it is eyeing double digit growth in 2023. Siemens Energy, Vonovia, Sartorius, Beiersdorf, Siemens, Symrise, E.ON, Puma, MTU Aero Engines, Adidas, RWE and Merck lost 1 to 2.2%.
Stock indexes finished higher Tuesday after traders reacted to remarks from Federal Reserve Chair Jerome Powell in his first appearance since the job market's surprisingly strong showing Friday. Stocks started Tuesday morning lower, but gained ground shortly after Mr. Powell began speaking in a broadcast conversation with Carlyle co-founder David Rubenstein. A flurry of selling then sent indexes back into the red, but stocks remained in positive territory later in the afternoon. The S&P 500 rose 52.92 points, or 1.3%, to 4164.00 and the Nasdaq Composite added 226.34 points, or 1.9%, to 12113.79. The Dow Jones Industrial Average rose 265.67 points, or 0.8%, to end at 34156.69. The ricochets up and down on Tuesday were evidence that tactical trading considerations - not the substance of Mr. Powell's remarks - drove Wall Street's reaction, said David Bahnsen, chief investment officer at The Bahnsen Group. A decline in quarterly earnings reported Tuesday morning by Carrier Global, a maker of heating and air-conditioning equipment, sent the stock down $1.76, or 3.8%, to close at $44.39. Chemicals giant DuPont gained $5.43, or 7.5%, to $77.79 after posting a better-than-expected adjusted profit. Shares of Bed Bath & Beyond fell $2.85, or 49%, to $3.01 after the beleaguered retailer reached a deal to sell additional equity, diluting existing shareholders' stakes.
There is no consistent trend on the stock exchanges in East Asia and Australia at midweek. In Tokyo, the Nikkei fell by 0.4 per cent, weighed down by the firmer yen and disappointing figures and outlooks from domestic companies. Nintendo fell by 7.4 per cent after a profit warning.
The benchmark 10-year U.S. Treasury yield edged up to 3.673%, from 3.632% Monday. The rate-sensitive two-year yield rose slightly to 4.469%. Yields rise as bond prices fall.
UBS raises Zur Rose target to CHF 43 (23.50) – Sell
CS raises Intesa Sanpaolo target to 2.60 (82.50) EUR – Neutral
Deutsche Bank lowers Fresenius target to EUR 23 (25) – Hold
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