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Daily Scan: Shanghai stocks fall 3%; Credit Suisse to raise $6.3 billion

By NexChange
Capital Markets

Updated throughout the day

October 21

Good evening everyone. Champagne wishes and stimulus dreams may have sent Japanese indices to new highs Wednesday but somebody big must’ve had his stops hit over in the mainland as the Shanghai Composite – after climbing as much 0.62% earlier in the day – finished the session down a staggering 3.06% on purported “profit taking.” China’s Shenzhen Composite meanwhile tanked a massive 5.94% while the aforementioned Japanese indices – the Nikkei and the Topix – climbed 1.91% and 1.84% respectively.

Over in FX, the Malaysian ringgit – weighed by oil’s recent slide – slipped another 1% while the kiwi – following a drop in whole milk powder prices – dipped 0.7%. The European markets meanwhile were mostly lower with the FTSE 100 down 0.2%, while the DAX and the CAC were both down around 0.5%.

Here’s what else you need to know:

Credit Suisse to raise $6.3 billion in capital. In a strategy update meant to strengthen its capital reserves, the Swiss bank announced that it plans to raise $6.3 billion through a CHF 4.7 billion rights offering and a CHF 1.35 billion private placement. It also plans to spin off its domestic Swiss business so it could “buy other banks,” and slim down its investment banking operations. Credit Suisse

Watchdogs scramble to rescue Sinosteel. In a rare intervention in the bond market, China’s National Development and Reform Commission and the Assets Supervision and Administration Commission both stepped in to avert a potential default by the financially-strapped Sinosteel. Bondholders of the state-owned enterprise – who were looking to redeem up to 2 billion yuan on their principal – were told that the redemption date was moved to November 16. SCMP (paywall)

Officials investigate former Sinopec chair over Angola deals. Anti-corruption investigators – in part of Xi Jinping’s three-year war against graft in the energy industry – are looking into the possibility that ex-Sinopec chairman Su Shulin led the state-owned oil major to overpay for its rights to an Angolan offshore oil field. Wall Street Journal (paywall)

Japanese exports disappoint. Expecting a 3.8% gain, analysts were instead surprised with a 0.6% climb in exports. Imports however were slightly better than expected, coming in at -11.1% versus the forecasted -12%, but still way worse than August’s -3.1% reading. Financial Times (paywall)

Kiwi credit card spending falls. Kiwi retailers sure won’t be happy about this. New Zealand credit card spending punched in its first decline for the year, falling 1.9% in September from a 1.1% climb the month before. Year on year, spending climbed just 7.3% - a huge drop from August’s record 10.5% rise. ForexLive

CICC slashes IPO target. The China International Capital Corp (CICC), arguably one of the country’s top domestic investment banks, has slashed its Hong Kong IPO target from $1 billion to $800 million, citing weak valuations. The fact that several large firms such as China Huarong and China Re are set to IPO in the same month may have factored in as well.

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