(BFM Bourse) – During Friday and Monday sessions, the turmoil on the markets linked to banking stress in the United States caused heavy releases on the securities of banking, insurance and investment companies. According to figures from MSCI, the loss is around 465 billion dollars.
The wind of stock market panic which blew on the financial markets during the sessions of Friday and especially Monday logically rolled the prices of insurance groups and banks.
Despite a rebound on Tuesday, BNP Paribas has lost 7.9% since the market opened on Friday, Crédit Agricole SA has dropped 4.2%, Société Générale 8.3% and Axa 7.3%, according to prices stopped around 2:20 p.m. Cumulatively, the market capitalization losses for the four tenants of the CAC 40 amount to more than 13 billion euros, according to our calculations.
At the global level, the figure is of course more dizzying. By compiling data from the MSCI World Financials and MSCI EM Financials indices, cited by Bloomberg and The echoesthe various financial groups making up these indices erased 465 billion dollars of market capitalization over the sessions on Friday and Monday, ie more than 430 billion euros.
More than 450 securities make up these two indices, which include, for example, for MSCI World Financials, the major American banks but also Berkshire Hathaway, Warren Buffett’s investment company.
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More than the capitalization of LVMH
To give an idea, this amount of 430 billion euros exceeds the market capitalization of LVMH, the largest company on the CAC 40 on this indicator.
The various securities of the banking groups were caught in the movement of fear linked to the bankruptcy of Silicon Valley Bank (SBV) which was placed under control of the FDIC, the American depository agency, because of the massive withdrawals of its customers. . Another American bank, Signature Bank, suffered the same fate.
This fear has especially affected the American regional banks, the market fearing that these establishments will in turn encounter difficulties. First Republic Bank thus fell by more than 60% on Monday. However, at the start of the session on Wall Street, the establishment of San Francisco regained 46% on Tuesday.
UBS nevertheless believes, in notes published on Tuesday, that the risk of contagion is now contained. The Swiss bank does not expect European institutions to be forced to urgently sell bond portfolios, which happened to SVB, which then suffered $ 1.8 billion in losses, these assets having seen their value melt due to rate hikes by the US Federal Reserve.
The market clearances, which have been observed on establishments in all countries, without distinction, should reverse in the short term, anticipates UBS. The Swiss bank maintains its preference for the securities of European banks compared to their American counterparts, in particular for questions of valuations.
Pictet AM sees for its part a “limited contagion” of SVB’s problems. The financial intermediary explains that the Californian bank had poor management, “a classic case of mismatch between assets and liabilities”, and judges that the American authorities have provided “decisive support” via their emergency measures. In Europe, Pictet AM points out that deposits are “more stable” than in the United States, which should also help to curb contagion.
“Investor appetite for the banking sector will be subdued. As a result, the valuation gap between weak and strong banks (and in the US, small and large) is likely to widen.” Swiss company.
Julien Marion – ©2023 BFM Bourse