After the heavy price losses on Friday, the Deutsche Bank share will be in focus on Monday.
(Photo: AP)
Frankfurt After the drastic losses on Friday, Deutsche Bank shares started to recover on Monday. The shares rose in the morning by more than three percent to 8.83 euros. This will make up for at least part of the losses. Commerzbank shares are also three percent higher.
Before the end of the week, Deutsche Bank shares had gone down 8.5 percent. At times, the course had previously even fallen by 15 percent, falling to its lowest level since October.
“The German financial system as a whole has proven to be resilient despite the turbulence on the financial markets,” said Bundesbank President Joachim Nagel on Monday, according to the text of the speech, in a speech marking the 100th anniversary of the Badische Gemeinde-Versicherungs-Verband. The European banking and financial system is “resilient and solidly positioned,” said Nagel. It has strong equity and liquidity positions.
The Bundesbank President also indicated that in case of doubt, the European Central Bank (ECB) would probably take measures to curb market panic: The euro system has “appropriate instruments at its disposal to be able to intervene to provide support if the worst comes to the worst,” said Nagel .
Investors also parted with other European bank stocks on Friday, but Deutsche Bank’s losses were particularly drastic. European bank stocks also rallied across the board on Monday. The pan-European banking index Stoxx 600 Banks was up around 0.7 percent. At the start of trading, the plus was even greater.
However, the recovery in risk premiums for credit derivatives was only slight: on Thursday and Friday, the risk premiums, which investors can use to protect themselves against default on Deutsche Bank bonds, fell from 1.42 percentage points to around 1.42 percentage points, according to data provider S&P Global Market Intelligence two percentage points up.
On Monday morning, the risk premiums were still at 1.91 percentage points. This means that investors have to pay 191,000 euros to secure a ten million euro package of Deutsche Bank bonds.
Silicon Valley Bank finds buyers
The fact that sentiment regarding financial stocks on the stock market has improved overall could be due to the fact that Silicon Valley Bank (SVB) has now found a buyer. The First Citizens Bank takes over the institute including all deposits and loans, as the US deposit insurance FDIC announced on Sunday evening.
The collapse of the SVB, number 16 in the American banking market, triggered severe turbulence on March 10, which led to an emergency takeover of the major Swiss bank Credit Suisse by UBS just over a week ago.
US investors were also reassured by the takeover of SVB. On the Frankfurt Stock Exchange, the papers of US regional banks such as Pacific West and KeyCorp increased in the double-digit percentage range. Ditto for the US premarket trading of First Citizens shares. After a positive start to trading, UBS stocks slipped slightly into the red in the morning.
More: Deutsche Bank shares temporarily fall in double digits – Chancellor Scholz tries to calm down