(Bloomberg) – Stocks linked to the Archegos Capital Management crisis were swept on Tuesday after it was said that Credit Suisse Group AG would reach the market with more than $ 2 billion, the last major share sale as part of the liquidation outage . of Bill Hwang’s fund.
ViacomCBS Inc. wiped out an initial loss to rise to 2.5%, Vipshop Holdings Ltd. increased by as much as 5.2% and Farfetch Ltd. added 2.1% on Tuesday after the Swiss bank dropped shares. All three of the companies bounced after trading in the pre-trade.
Credit Suisse slipped to 0.6% in U.S. trade after rising earlier in Zurich, even after the bank said it would compare a write-off of 4.4 billion francs ($ 4.7 billion) to the explosion of Archegos. The S&P 500 index did not change much on Tuesday morning.
Shares of companies totaling more than $ 20 billion in previous trading operations have taken a stormy ride after Hwang and his private investment firm became the center of one of the biggest margin calls of all time. A basket of equally-weighted stocks linked to the fund has fallen 33% since peaking on March 22, according to data compiled by Bloomberg.
“The aftermath of the collapse of Archegos Capital appears to be mostly,” said Edward Moya, senior market analyst at Oanda Corp. ‘Important brokers will have to deal with further regulatory reviews, and greater transparency will eventually be needed to avoid family offices. to circumvent federal security laws. The worst of the explosion of Archegos Capital must be behind us. ”
The cascade of trade losses echoed from New York to Zurich to Tokyo and beyond, as banks clinched their exposure to the massive winding-up of leveraged financing by Archegos. Last month, giant block transactions by Goldman Sachs Group Inc. and Morgan Stanley start after Archegos could not pick up the margin calls. It has Nomura Holdings Inc. and Credit Suisse potentially incurred significant losses.
About 34 million shares in ViacomCBS were offered on Monday, 14 million shares in Vipshop and 11 million shares in Farfetch. This is only a fraction of the size traded by banks at the end of March.
(Updates with Tuesday’s trading after the market opens.)
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