Overseas news
In the US, the S&P 500 posted its largest single-day advance since January after major US banks injected $30 billion in deposits to troubled regional lender First Republic Bank.
These deposits will provide First Republic with cash to satisfy depositors who want to pull their money out. This move is a show of support by the various banks for the US financial system, and it could help restore some confidence after the recent closure of Silicon Valley Bank (SVB) and Signature Bank.
Credit Suisse will borrow up to $54 billion from the Swiss central bank to boost its liquidity, easing worries of a cascading financial crisis in the EU. However, the proposal of a forced combination with its larger rival, UBS Group AG, was rejected.
Credit Suisse is one of the leading financial services companies around the world, with a focus on private banking and asset management. The higher liquidity from the loan will help reduce its vulnerability to a bank run, which is a current concern for investors around the world.
Local developments
PLDT is acquiring 100% of Sky Cable Corporation from the Lopez Group for P6.75 billion (P4.90 per share) to boost coverage and services, especially in remote areas.
This move could allow PLDT to stay competitive in an industry that is facing slowing growth due to saturation in key areas.
S&P Global Ratings said the Philippine banking system has reasonable buffers to weather effects from the failure of Silicon Valley Bank, but cited that further knock-on stress events could continue to test these buffers.
A knock-on event is an indirect effect of a certain situation that happens. In some cases, weakening investor confidence could be seen as this type of event.
There’s some uncertainty in the news, but not a lot of actual developments just yet. For now, it might be prudent to avoid big changes to your portfolio.
