The world’s largest banks lose value in their shares during the weeks marked by the pandemic
The spread of coronavirus infection is affecting the world economy and traditional financial institutions are already suffering. The world’s largest banks have seen their shares lose value in recent weeks and months as they faced cash withdrawal pressures and prepared to deal with a shrinking asset base.
China’s “big four” see their shares fall
No one has a clear idea of where this is going or what is next for the planet’s financial system. However, what is obvious is that some of its elements are already under stress. Reports from banks imposing withdrawal limits in parts of the US USA They indicate that a cash crisis is brewing. New interest rate cuts, more money printing, and capital flight to unmanaged assets, such as cryptocurrencies, especially bitcoin, are going to limit the value that banks have under their control.
China, where the covid-19 outbreak began, is home to the world’s largest banking sector in terms of assets. In mid-2019, the official figure was over $ 40 trillion, despite liquidity problems with some small regional banks and a credit crisis in the interbank market that required the intervention of the People’s Bank of China. The four major state-owned commercial banks, the Industrial and Commercial Bank of China, the China Construction Bank, the Agricultural Bank of China and the Bank of China, top the list of the 100 largest banks, according to the latest edition of the S&P Global Market Intelligence report. Com
These financial giants have been watching their stock prices drop in recent months. From this year’s high of 6.01 yuan (approximately $ 0.85) in early January, ICBC shares are now trading at just over 5.10 yuan ($ 0.72), and CCB shares fell from 7.49 yuan ($ 1.06) on November 7 at a low of 6.17 yuan ($ 0.87) last Monday, before recovering to 6.37 yuan ($ 0.90) on March 25.
The shares of the other two major Chinese banks also lost value, especially in the past month, as authorities were struggling to stem the spread of the deadly coronavirus and deal with the economic consequences of the epidemic. Japanese financial group Mitsubishi UFJ, another Asian banking giant, experienced a sharp decline in its share value, from 566 yen ($ 5.08) on February 21 to 384 yen ($ 3.45) on March 19. Its shares are currently trading for around 450 yen ($ 4.04).
Western banks affected by the spread of the virus
The past few weeks brought similar results for major banking institutions in the United States, which now has more than 50,000 confirmed cases of covid-19. JP Morgan shares fell to $ 79.03 from $ 137.49 per share on February 20. Bank of America shares fell from a monthly high near $ 33 to around $ 18 on the first day of the week before rising again to around $ 20 on Tuesday, when the stock markets reacted to the latest Reserve announcement. Federal. The Fed committed to open or infinite quantitative easing in response to the economic challenges posed by the epidemic.
Other banks that have been affected by the crisis that led to a slowdown in economic activity worldwide include the European HSBC and BNP Paribas. Shares of the London-based investment bank and financial services holding company, which sold for more than $ 35 about a month ago, started this week at just over $ 28. BNP Paribas, based in Paris, saw its shares drop nearly 50% to € 25.43 ($ 27.40), from € 48.70 ($ 52.69) on February 25. Deutsche Bank shares posted similar losses, falling from about € 9 ($ 9.74) in late February to a monthly low of less than € 5 ($ 5.39) in mid-March.
The global financial system is in the doldrums, companies are paralyzed, it is a sign that no one escapes a threat like the coronavirus, the blockchain-bitcoin technology, can help society to find solutions that adapt to their needs. New announcements awaited.
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