UBS and Credit Suisse in free fall under CHF 10

UBS and Credit Suisse shares are being sold off in the wake of the corona crisis. On Friday, both titles fell below the CHF 10 mark.

The shares of the two major Swiss banks UBS and Credit Suisse (CS) cost practically the same on Friday morning: UBS was trading at CHF 9.90 at around 10 a.m., that of CS at CHF 9.94. The dramatic fall in the price of both bank stocks continued on Friday at -2.6 percent (UBS) and -2.8 percent (CS).

In the past ten trading days, the losses of both shares have been well over 20 percent. At the same time, they are the worst performers in the Swiss Market Index (SMI).

For the first time together under 10 francs

It is the first time that the two big bank stocks are trading together under the CHF 10 mark. UBS only broke this mark last autumn. The CS share had suffered this fate in the summer of 2016.

The corona crisis apparently acts as a fire accelerator for the two stocks. Both UBS and CS suffer – like all major European banks – from the negative interest rate environment. The Fed’s recent rate cut was another drop in a barrel that was already overflowing.

Passivity will spread

But now the yields on ten-year US government bonds have fallen below the 1 percent mark – the corresponding “Swiss” has long been in the negative range.

In addition, bank revenues are now likely to plummet. In periods of uncertainty, investors stay away from the stock markets after selling in panic.

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