Credit Suisse shares jumped around 18% on Thursday after the company secured a lifeline from the Swiss central bank to shore up investor confidence, reversing some of the losses that stripped off a quarter of its market value the day before.a $54-billion loan from the Swiss National Bank helped stem heavy selling in financial markets in Asia on Thursday and prompted a modest rally in European equities.
The initial reception from markets of news of the lifeline was positive. Credit Suisse shares surged by as much as 32% in the first few minutes of trade, following Wednesday’s 24% slide that was triggered by the bank’s biggest backer saying it could not offer any more financial assistance for regulatory reasons.In its statement early on Thursday, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs .
Analysts at JPMorgan said in a note that a takeover was the most likely scenario for Credit Suisse, especially by rival UBS. The value of Credit Suisse’s bonds rose sharply. The bank’s additional tier 1 dollar-denominated bonds jumped by around 10 cents, having plummeted below 50 cents on the dollar the day before.
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