UBS Weekly Review: Tough Times for European Banks
UBS (NYSE:UBS) has had a volatile few weeks as the stock’s movement has been largely dictated by the drama in Greece. As the bank’s shares slowly recovered last week and the beginning of this week, it slumped by nearly 9% on Wednesday with the banking sector bearing the brunt of eroding investor confidence about Italy. More specifically, European banks saw the largest loss of value with British banks dipping 11%, and Credit Suisse (NYSE:CS) declining by 10%. With markets in Europe showing a significant fall in prices for a second consecutive day, it looks like UBS’s stock will shed more value in the next few days with the global focus now shifting to Italy from Greece.
With the market not paying much heed to any positive news about individual companies, UBS’s recent announcement of closing its U.S. asset-backed securities unit did not visibly help the stock. [1] But it must be noted that the bank, which has yet to appoint someone to take the helm of the company after group CEO Oswald Grübel resigned in late September in the wake of the unauthorized trading incident, has on most occasions in the past shown more resilience to market shocks – with the bank almost always showing lower declines than most of its peers in the global market.
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Notes:- UBS To Close US Asset-Backed Securities Unit – Report, NASDAQ, Nov 9 2011 [↩]