Credit Suisse Group AG’s recent shareholder meeting took an awkward turn when a Mozambican activist questioned Chairman Urs Rohner over the bank’s role in fraudulent deals that saddled her country with $2 billion of debt, The Wall Street Journal reported. The confrontation halfway through Friday’s meeting was the latest example of the rising international pressure on Credit Suisse to forgive loans it made to Mozambican state-owned companies engaged in an alleged complex fraud, and potentially, to pay damages to victims.
GAM moved closer to drawing a line under the problems that have engulfed the Swiss fund manager with a deal to sell about £600m of bonds that will complete the liquidation of funds at the heart of its crisis, the Financial Times reported. The news from the Zurich-based group sent its shares up 14 per cent on Wednesday. It stunned the market last summer when it suspended Tim Haywood, a London-based investment director who oversaw the group’s SFr11bn absolute return bond funds (ARBF).
For investors trying to make sense of recent extreme moves in the global credit market, bad news: The roller coaster may go on. The long-feared liquidity menace is well and truly here, and it’s overshadowing more prosaic factors like low default rates and corporate earnings when turbulence in the $13 trillion market erupts, according to new research from UBS Group AG, Bloomberg News reported. “Dizzying” moves of late have been driven by rapidly rising and falling liquidity, strategists at the bank argued this week.
Credit Suisse Group AG’s three-year turnaround ended with more of a whimper than a bang after trading losses eroded gains in wealth management and investment banking. The Global Markets business posted a larger-than-expected loss of 193 million francs ($191 million) in the fourth quarter, offsetting wealth management and investment banking results that beat estimates, Bloomberg News reported. In a tough quarter for money managers, the Zurich-based bank bucked a trend of large outflows at rivals, adding about half a billion francs of net new money.
Puma Energy, the retail and storage arm of commodities trader Trafigura, plans to restructure and sell assets to cut its debt and improve profits, a source familiar with the matter said, Reuters reported. Puma has hired consulting firm McKinsey under new chief executive Emma Fitzgerald who took over last month from Pierre Eladari, who had overseen rapid expansion, the source said. Although its full-year 2018 results have not been finalised, Puma expects a small net loss or profit, the source added.
Airopack’s recapitalization plan collapsed as lenders including Apollo Global Management demanded repayment following the discovery of “inadequate sales and accounting practices”, the Swiss aerosol packaging maker said on Monday, Reuters reported. Shares in the company, which makes plastic aerosol dispensers for Procter & Gamble’s Gillette shaving cream, fell as much as 60 percent and have lost almost all their value since hitting 13.5 Swiss francs ($13.46) three years ago.
Britain’s financial watchdog has dropped a criminal probe into Credit Suisse related to an alleged fraud in Mozambique, but is still checking the bank and individuals for any breaches of conduct rules, the watchdog said on Tuesday. In 2016, the Financial Conduct Authority (FCA) launched an investigation into the Swiss bank’s activities in Mozambique, where around $2 billion of loans to state-owned companies pushed the country into a debt crisis, Reuters reported.
UBS Asset Management has turned bullish on beaten down Asia junk dollar bonds and expects investors to buy more on borrowed money due to the appeal of higher yields, Bloomberg News reported. The firm is positive on such securities from Chinese property companies in particular, its key overweight globally within high yield. The money manager expects China’s stimulus measures to help borrowers gain access to funding onshore, reducing offshore bond sales. Despite a recent rally in Asia junk securities, yields are still near the highest since 2012, according to a Bloomberg Barclays Index.
Mozambique has indicted 18 citizens for their involvement in fraud involving $2 billion in loans to state-owned companies, the attorney general's office (AGO) said on Monday, in a scandal that has ensnared two major international banks, the International New York Times reported on a Reuters story. "Mozambique AGO is indicting 18 defendants, (ranging) from public workers and other citizens, on charges of abuse of power, abuse of trust, swindling and money laundering," it said in a statement.
Emerging markets were a boon for bankers after the 2008 crisis, when resource-rich Africa and Asia seemed to have definitively decoupled from the debt-laden economies of the U.S. and Europe. Yet as lawsuits over alleged corruption and bribery pile up, an uglier side of those glory days is emerging — and taxpayers and investors will be left to pick up the tab, a Bloomberg View reported. Credit Suisse Group AG’s dealings in Mozambique, where about half the population lives in poverty, are the latest to be thrust in the spotlight by U.S. prosecutors.