Global Financial Stocks Lose $465 Billion Market Value In Just Two Days As SVB Collapse Deepens Fears

In just two days, global financial stocks have lost a mammoth $465 billion in market value as investors cut exposure to lenders from New York to Japan in the wake of Silicon Valley Bank's collapse.

Bloodbath In Financial Stocks & Indices

indiatimes

Indicating a global bloodbath in financial stocks and indices, losses continued to widen today, with the MSCI Asia Pacific Financials Index dropping as much as 2.7% to the lowest since Nov. 29. Mitsubishi UFJ Financial Group Inc. slid as much as 8.3% in Japan, while South Korea's Hana Financial Group Inc. fell 4.7% and Australia's ANZ Group Holdings Ltd. lost 2.8%, as per a Bloomberg report.

There are rising concerns that financial firms could see an impact from their investments in bonds and other instruments on the SVB-induced worry. Treasury yields plunged Monday amid expectations the Federal Reserve will hold off raising rates due to turmoil in the banking system.

"The financial markets are walking on eggshells," says John Woods, Switzerland¡¯s second-biggest bank; Credit Suisse's chief investment officer for Asia-Pacific, said in an interview with Bloomberg. "We really need to know precisely what impact this is likely to have around the broader market. My sense is that the Fed will probably pause because I think this is largely to do with liquidity risk."

Also Read: Hindenburg Trolled For Failing To Detect SVB Crisis

$465 Billion Lost In Two Days

moneycontrol

The aggregate market value of companies included in the MSCI World Financials Index and the MSCI EM Financials Index has dropped about $465 billion since Friday. US regional banks were among the hardest hit Monday as the KBW Regional Banking Index sank 7.7%, its sharpest plunge since June 2020.

Major northern Asian banks mostly have "minimal risk of the sudden run on deposits that crumpled Silicon Valley Bank" given their solid deposits, asset mixes, and liquidity, Bloomberg Intelligence analyst Francis Chan wrote in a note. "Smaller lenders may harbor liquidity and credit risks that could easily be overlooked."

Japanese banks feature prominently among the highest unrealized loss-to-equity ratios in the region, according to data on about 130 Asia Pacific lenders with more than $5 billion in assets compiled by Bloomberg. Jimoto Holdings Inc., Tsukuba Bank Ltd., and Fukushima Bank Ltd. are among those with unrealized loss-to-equity ratios of at least 9%, as per a Bloomberg report. All three, which have market caps below $150 million each, have fallen more than 10% in three days.

For more such interesting content and the latest financial news, keep reading Worth. Click here.