Shares in Swiss bank UBS AG took a new tumble on Monday, falling further than a hard-hit banking sector after reports it will have to write down another $5 billion on its risky investments in the second half of the year.
News that lack of liquidity had forced U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) to file for bankruptcy protection dragged down financial sector stocks worldwide.
Without quoting sources, Swiss paper Sonntags Zeitung said UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz), Europe’s hardest hit bank in the financial market turmoil, would have to write down another $5 billion on its risky investments in the second half.
The paper said it expected UBS to update the market before an October 2 shareholder meeting. UBS declined to comment.
“The bad news is that the banking crisis is not over and that there are still lots of bad credits around,” Claude Zehnder, head of research for technical trading at Zuercher Kantonalbank, said.
“Also, the possibility has arisen this weekend of further writedowns,” he added.
UBS announced last month writedowns had climbed a further $5 billion in the second quarter to top $42 billion, and said it was splitting the investment bank that had dragged it into the red from its core wealth management business.
UBS shares were down 10.1 percent at 21.14 Swiss francs at 0815 GMT, underperforming the DJ Stoxx European banks index , which was down 5.8 percent http://fcrwizard.com. UBS shares had rallied recently after losing two-thirds of their value in the last year.
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