Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) is once again in freefall today. At the time of writing, the ASX 200 has lost another 1.46%, which brings its losses to more than 6% over just the past month.

This is an awful thing for investors to deal with – no one likes seeing the value of their shares fall this rapidly. But it can also be an opportunity to pick up cheap ASX 200 dividend shares, if you let it.

The global financial system is going through a rough time, no doubt about it. Collapsing banks are never a good thing. But consider the context: ASX 200 shares have been through far worse before.

There was COVID, of course.  But think about all the wars, recessions, depressions, and calamities that the Australian economy has faced over the past 100 years. After every single crisis, ASX shares have always recovered and hit new heights.

Sure, this time might be different. But I doubt it. And if it is, we’ve all got bigger things to worry about anyway.

In times like these, I always ask myself: ‘What would Warren Buffett do?’

Would Buffett be buying cheap ASX 200 dividend shares today?

The legendary Warren Buffett is one of, if not the, greatest investor of all time. And he has very explicit advice for what to do when markets are in panic mode.

We all know about Buffett’s most famous quote – the one about being greedy when others are fearful. But here are another two quotes that augment this simple but powerful idea:

The first is from Buffett’s 2016 letter to the shareholders of Berkshire Hathaway:

Charlie and I have no magic plan to add earnings except to dream big and to be prepared mentally and financially to act fast when opportunities present themselves.

Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.

The second is from Buffett’s 2013 letter:

A ‘flash crash’ or some other extreme market fluctuation can’t hurt an investor any more than an erratic and mouthy neighbor can hurt my farm investment.

Indeed, tumbling markets can be helpful to the true investor if he has cash available when prices get far out of line with values. A climate of fear is your friend when investing; a euphoric world is your enemy.

So with this wisdom in mind, I think it’s a perfect time to be buying ASX 200 dividend shares.

Remember, falling share prices can be especially lucrative for dividend investors. That’s because a dividend share’s yield rises for new investors when its share price falls. To illustrate, let’s look at the Westpac Banking Corp (ASX: WBC) share price.

A month ago, Westpac shares were going for $22.76 each. Today, the bank is almost 7% below that share price, at its current going rate of $21.25 a share. Now, Westpac shares have paid out two dividends over the past 12 months, for a total of $1.25 in dividends per share.

At the share price of $22.76 that NAB recorded a month ago, these dividends would have given this ASX 200 bank share a dividend yield of 5.49%. But at today’s share price of $27.77, we instead have a higher yield of 5.88%.

Repeat this process with any ASX 200 divided share that’s fallen in value over the past month, and you will get a similar result.

So the current market could be a great time to follow Buffett’s advice and load up on ASX dividend shares. I know I am.

The post Is now the time to be bold and snap up cheap ASX 200 dividend shares? appeared first on The Motley Fool Australia.

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More reading

• What’s going on with Credit Suisse and why is it impacting ASX 200 shares?
• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Investing in ASX 200 shares? Here’s what to expect from the US Fed next week
• Guess which ASX lithium share just rebounded 15%

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Macquarie Group Ltd (ASX: MQG) share price opened 4% lower today at $170.96 amid the S&P/ASX 200 (ASX: XJO) tumbling by more than 130 points.

This follows tumultuous trading sessions overnight across Europe and in the United States after shares in Credit Suisse Group AG (SWX: CSGN) plummeted 24%, prompting a halt in trading.

Credit Suisse is Switzerland’s second-biggest bank.

Investors fear a contagion in the global banking system stemming from the collapse of Silicon Valley Bank (SVB) and Signature Bank in the US over the past week.

All this drama is having a flow-on effect on ASX bank shares.

Today, they are once again in the red, with the Macquarie share price faring worst.

Let’s take a look.

What’s happening with the Macquarie share price today?

The Macquarie share price is down 3.2% to $172.38 at the time of writing.

Here’s what’s happening with the other ASX bank shares today:

• The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 2.4%
• The National Australia Bank Ltd (ASX: NAB) share price is down 2.33%
• The Westpac Banking Corp (ASX: WBC) share price is down 2%
• The Commonwealth Bank of Australia (ASX: CBA) share price is down 1.8%.

The banking majors have all taken a hit following the collapse of SVB last week.

The Macquarie share price has fallen by 7.85% over the past five trading days.

Is the Macquarie share price a buy after a near 8% fall?

So, is this a buy-the-dip opportunity on ASX bank shares — and particularly Macquarie at this price?

As my Fool colleague James reported this week, Morgans is backing the Macquarie share price for significant growth over the next 12 months.

The broker has an add rating on the ASX bank share with a 12-month price target of $214.51.

This implies a potential upside of 24.5% for investors who buy Macquarie shares today.

Morgans likes how Macquarie is travelling in FY23 and cites structural growth opportunities.

Morgans says:

MQG is a quality franchise, exposed to structural growth areas, and the company has performed exceptionally well in a more difficult FY23 environment.

MQG has also consistently delivered attractive returns over time (~15% average ROE) and with >10% share price upside to our price target (A$214), we maintain our ADD recommendation.

Macquarie’s FY23 Q3 trading update on 7 February shocked analysts, with fellow broker Goldman Sachs noting it implied that Macquarie has already achieved about 97% of the broker’s FY23 profit forecast.

Morgans tips Macquarie to pay a partly franked dividend of $7.41 per share in FY23 and $7.13 in FY24.

Based on today’s fallen Macquarie share price, this means dividend yields of 4.3% and 4.1% respectively.

What’s the story with Credit Suisse?

As we reported earlier, Credit Suisse stock plunged after its major shareholder, Saudi National Bank (SNB) confirmed overnight that it would not increase its position in the bank.

SNB holds a 9.88% stake in Credit Suisse. It can’t buy more because of regulatory restrictions.

Credit Suisse shares had already fallen by 30% since early February before the comments last night.

The 24% freefall that followed prompted an automatic pause in the trading of Credit Suisse shares. The stock has now lost more than 50% of its value since early February.

Credit Suisse also dragged down other European banking stocks and US banking shares overnight.

French banking stock Societe Generale SA fell 12.2% and German bank Commerzbank AG fell 8.7%.

The US Dow Jones Industrial Average closed down 0.87% while the United Kingdom’s FTSE 100 Index fell 3.8%, the biggest single-day loss since Russia invaded Ukraine.

Credit Suisse has been beset with problems for some time now.

The Swiss central bank has pledged to provide Credit Suisse with extra liquidity if required.

The post Macquarie share price slides amid banking rout, broker tips 24% upside appeared first on The Motley Fool Australia.

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More reading

• Buy Macquarie and this ASX 200 passive income share: analysts
• 5 things to watch on the ASX 200 on Tuesday
• Experts say these fantastic blue chip ASX 200 shares are buys
• Why are ASX 200 bank shares like CBA being annihilated today?
• Buy these ASX 200 dividend shares for passive income: analysts

Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, Macquarie Group, and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX 200 stock IPH Ltd (ASX: IPH) is tumbling today amid an update on the company’s latest cybersecurity attack.

Shares in the intellectual property services provider are sinking 11.92% at the time of writing to $7.39 apiece. For perspective, the S&P/ASX 200 is down 1.52% today.

Let’s take a look at what is weighing on this ASX 200 stock today.

Cyber attack

IPH shares are plunging after the company provided more details on a cybersecurity incident.

As my Foolish colleague James reported on Tuesday, the company entered a trading halt on Tuesday after news first emerged of the attack.

IPH is a global intellectual property services company with clients including multinationals in 25 countries around the world.

In today’s release, IPH advised it detected “unauthorised access” to a portion of its IT environment on 13 March.

IPH said the investigation may take “some time to complete”. Since discovering the cyber incident, IPH has been working to “secure its IT environment”.

The company is conducting a forensic investigation with leading cybersecurity and forensic IT advisors.

The company’s head office and two of its member companies in Australia — Spruson and Ferguson and Griffith Hack — have been impacted.

The incident, based on preliminary findings, is mainly limited to the document management systems (DMS) of head office and the practice management systems (PMS) and DMS of its member companies. Commenting further, IPH said:

The information contained in the DMSs includes documents relating to the administration of these entities and, in the case of the two IPH member firms, client documents and correspondence.

The PMSs contain IP case management information (such as filing timelines) relating to the practice of the two IPH member firms.

The investigation underway is focussed on determining whether the information stored in these systems has been accessed by the unauthorised third-party.

IPH apologised to clients and the community and said it will continue to update shareholders, clients, and stakeholders.

Share price snapshot

The IPH share price slid 8% in the past year, while it has descended 11% in just the past month.

This ASX 200 stock has a market capitalisation of about $1.7 billion based on the current share price.

The post ASX 200 stock IPH sinks 12% following cyber attack update appeared first on The Motley Fool Australia.

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More reading

• Another ASX 200 company has been hit with a cyber incident. Here’s what we know

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IPH. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Hot on the heels of news that IPH Ltd (ASX: IPH) has been hit by a cyber-attack, another ASX All Ords stock has requested a trading halt today after becoming the latest victim of hackers.

That ASX All Ords stock is Latitude Group Holdings Ltd (ASX: LFS), which is one of Australia’s largest instalments and lending businesses.

What’s happening to this ASX All Ords stock?

According to the release, Latitude detected unusual activity on its systems over the last few days that appears to be a sophisticated and malicious cyber-attack.

The company believes that the activity has originated from a major (unnamed) vendor used by Latitude.

And although the company took immediate action, the attacker was able to obtain Latitude employee login credentials before the incident was isolated. This has allowed the hacker to use the employee login credentials to steal personal information that was held by two other service providers.

What’s the damage?

The release notes that, as things stand, Latitude understands that approximately 103,000 identification documents were stolen from the first service provider and approximately 225,000 customer records were stolen from the second service provider.

In respect to the identification documents, more than 97% of these documents are copies of drivers’ licences. This means approximately 100,000 people have had their drivers’ licences stolen.

What now?

Latitude has apologised for the breach and is taking immediate steps to contact impact customers.

Management advised that it is continuing to respond to the attack and is doing everything in its power to contain the incident and prevent the theft of further customer data. This includes isolating and removing access to some customer-facing and internal systems.

It is also working with the Australian Cyber Security Centre and has alerted relevant law enforcement agencies and engaged several cyber security specialists to assist with Latitude’s response.

Sadly, it seems that some companies have not learned from the Optus and Medibank Private Ltd (ASX: MPL) attacks from last year.

The post Another ASX All Ords stock has just been halted amid a ‘malicious’ cyber attack. Here’s the latest appeared first on The Motley Fool Australia.

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More reading

• What’s happening with the IGO share price on Thursday?
• How much would I need to invest in ASX income shares to earn $500 a month?
• Amid the carnage, this ASX tech stock is rocketing 15%. Here’s why
• Why is the BHP share price tumbling 4% today?
• What’s going on with Credit Suisse and why is it impacting ASX 200 shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IPH. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The IGO Ltd (ASX: IGO) share price is down 4% in morning trade to $11.94 per share.

Shares closed yesterday trading for $12.30 apiece.

Now investors could have expected the IGO share price to edge lower today. But not by 4%.

Why are ASX 200 investors hitting the sell button?

The reason the IGO share price was most likely to slip this morning is that the stock is trading ex-dividend today.

On 31 January, the ASX 200 lithium stock reported some stellar half-year results, fuelled by all-time high lithium prices in late 2022.

With profits up a whopping 549% year on year, the board declared a fully franked interim dividend of 14 cents per share. That’s a new record-high payout from the company.

As of this morning, shares are trading without rights to that dividend. And you’ll commonly see stocks slide by the amount of their dividend payout.

But the IGO share price is down 36 cents per share, not 14 cents

The ex-dividend day explains some of the price fall, but not all.

IGO also is being impacted by broader falls across the market.

With the banking crisis looking to have spread from the United States-based SVB collapse to Europe, with some serious concerns about the well-being of Credit Suisse. The bank’s shares crashed 24% on the SIX Swiss Exchange overnight.

Investor angst has sent the S&P/ASX 200 Index (ASX: XJO) down 1.9% at the time of writing, with all of the ASX 200 lithium shares strongly underperforming the benchmark. In fact, IGO’s shares are holding up better than its rivals.

IGO share price snapshot

As you can see in the chart below, the IGO share price is now down 12% in 2023. Shares are flat over the full year, though investors who held shares over the 12 months will have received two fully franked dividends.

The post What’s happening with the IGO share price on Thursday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Hoping to dig into the record IGO dividend? You’d better be quick
• 3 ASX 200 shares trading ex-dividend on Thursday
• Why are ASX 200 lithium shares falling so hard today?
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX income shares can be the way for investors to achieve wonderful passive income. Dividends could be the way to unlock $500 per month, or even more.

Banks are now offering investors a higher interest rate on their savings. Finally. But, one of the drawbacks of bank interest compared to dividends is that if investors want growth of the passive income, they need to re-invest the interest. But, businesses can both pay dividends and grow profit, enabling a bigger dividend payment next year, so the investor can keep spending the dividends and yet get pay rises.

However, while most competitive savings accounts offer a fairly similar interest rate, the dividend yields of ASX income shares can be very different.

Dividend yields can range from under 1% to over 10%.

Dividend goals

Achieving a monthly passive dividend income of $500 is an admirable goal. That’s a real cash flow boost to someone’s personal finances.

Getting $500 per month is the equivalent of getting $6,000 per year. Someone can do quite a lot with $6,000, though not as much as before all of the inflation occurred.

How much someone needs to make $500 per month or $6,000 per year, entirely depends on the average dividend yield of the ASX income share portfolio.

If the portfolio had a 5% dividend yield, then an investor would need to have a $120,000 portfolio.

With a 7.5% dividend yield, to make $6,000 per year we’d be talking about an $80,000 portfolio.

A 10% dividend yield would mean investors would only need a $60,000 portfolio, though businesses paying that high of a yield may not be the most reliable.

However, a 2.5% dividend yield would require a portfolio worth $240,000.

With a dividend yield of just 1%, a portfolio would need to be $600,000 in size.

Which ASX income shares to buy?

It’s up to investors to decide how much dividend income they’re aiming for.

Each business comes with its own risks and growth plans.

The company’s price/earnings (P/E) ratio can have an important impact on the dividend yield. The higher the P/E ratio, the lower the dividend yield. A company’s dividend payout ratio from the profit can also have a major impact on what the dividend yield is.

For example, in FY23, ASX income shares like Telstra Group Ltd (ASX: TLS) and Wesfarmers Ltd (ASX: WES) could pay grossed-up dividend yields of around 6%, while a bank like National Australia Bank Ltd (ASX: NAB) could pay a grossed-up dividend yield of over 8%.

However, I think it’s integral that investors look for businesses that can grow profit. Growing profit means it’s much more likely that the business can maintain and grow its dividend. I think it’s also more likely that share price growth will occur over time.

That’s why I prefer to look at ASX income shares with mid-to-lower-single-digit yields because I think, generally, they’re more likely to be re-investing and growing. I regularly write about some of the names I own in my portfolio.

The post How much would I need to invest in ASX income shares to earn $500 a month? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX passive income stocks for the next 10 years and beyond
• Are NAB shares a buy following the SVB-induced dip?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Should I load up on Telstra shares at $4 each?
• 5 ASX 200 shares that inflation can’t touch: expert

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The market may be a sea of red on Thursday, but that hasn’t stopped one ASX tech stock from rocketing higher.

In morning trade, the Pushpay Holdings Ltd (ASX: PPH) share price is up 15% to $1.30.

Why is this tech stock rocketing?

The catalyst for this rise has been news that Pegasus BidCo has returned with an improved takeover offer. This comes after shareholders rejected a previous offer at a scheme meeting earlier this month.

According to the release, Pegasus has lifted its offer by 6% from NZ$1.34 cash per share to NZ$1.42 per share.

Based on current exchange rates, this represents an offer of A$1.32 per share, which is just a touch above where this tech stock is trading today.

This values Pushpay’s equity at NZ$1.63 billion or A$1.52 billion.

Will it happen this time?

It is looking more likely that this ASX tech stock will be successfully taken private this time.

That’s because a number of large investors that rejected the previous offer are now on board and intend to vote in favour of the scheme.

In addition, some shareholders have agreed to accept a lower amount in order to get the deal over the line. The release notes that a small number of sophisticated, professional offshore event-driven shareholders have agreed to accept the original cash consideration of NZ$1.34 per share.

Combined, shareholders holding a total of 28.9% of Pushpay’s issued capital intend to vote in favour of the scheme.

What’s next?

Pushpay’s non-conflicted directors unanimously recommend that shareholders vote in favour of the scheme and plan to vote all of their own shares in its favour. This is in the absence of a superior proposal.

Management advised that a new scheme meeting will be held as soon as practically possible. And for the scheme to proceed, it is necessary that two voting thresholds are met. These are:

75% or more of the votes of shareholders in each interest class who are entitled to vote and who actually vote must be voted in favour of the Scheme; and more than 50% of the total number of Pushpay shares on issue must be voted in favour of the Scheme.

The scheme remains subject to Pushpay shareholder and New Zealand High Court approvals and is also subject to other customary conditions.

The post Amid the carnage, this ASX tech stock is rocketing 15%. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why Kingsgate, Neuren, Newcrest, and Pushpay shares are rising today
• Why Mesoblast, PolyNovo, Pushpay, and Weebit Nano shares are charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pushpay. The Motley Fool Australia has positions in and has recommended Pushpay. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BHP Group Ltd (ASX: BHP) share price is down almost 4% in early trading on Thursday.

The S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday at $45.56 per share. Shares are currently swapping hands for $43.83 apiece, a drop of 3.8%.

The ASX 200 is also down 1.97% in morning trade.

But the BHP share price looks to be facing additional headwinds from two fronts.

What’s pressuring the BHP share price today?

The first headwinds dragging on the BHP share price are tumbling commodity prices.

Atop a big fall in the oil price, iron ore – BHP’s top revenue earner – is down 1.2% to US$130.20 per tonne. And copper, the ASX 200 miner’s second biggest revenue earner, dropped 1.1% to US$8,833.50 per tonne.

Much of that looks to be due to increasing global jitters as contagion from the SVB collapse is spreading to Europe, with Credit Suisse shares closing down 24% on the SIX Swiss Exchange.

The BHP share price on the ASX is also heavily influenced by price moves of its US-listed stock. And BHP shares slipped a precipitous 4.7% on the NYSE overnight.

What else are ASX 200 investors considering

Other news that could be dragging on the BHP share price is the expansion of the United Kingdom-based class action lawsuit related to the 2015 Samarco Fundao iron ore tailings dam collapse in Brazil.

The Fundao Dam was owned and operated by Samarco Mineracao. BHP Brasil and Vale each hold a 50% interest in Samarco. The dam’s collapse killed 19 people and caused massive environmental damage.

According to an announcement released by BHP this morning, on 25 February, a further claim was filed to add some 500,000 new claimants to the English proceedings, bringing the total number to around 700,000.

Potential compensation was reported as £36 billion (AU$66 billion). Full details of the claims have not yet been received and damages remain unspecified.

BHP said it will defend the UK court action, stating that the class action “duplicate[s] matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings in Brazil. All claimants have avenues in Brazil to resolve any potential claims…”

BHP and Vale have spent R$28.1 billion (US$5.9 billion) on remediation and compensation programs through the Renova Foundation. As at 31 December, BHP’s provision related to the Samarco dam failure was US$3.1 billion.

And the BHP share price could get buffeted by further developments in the English proceedings down the road.

According to the miner:

Given the status of the English Proceedings, it is not possible to provide a range of possible outcomes or a reliable estimate of potential future exposures to BHP in connection with these proceedings.

RBC analysts noted the class action will cause ongoing issues.

“The situation is a tricky one for BHP and is likely to provide a stream of negative headlines over the coming years, or until this is denied by the courts or settled,” RBC analysts said (courtesy of The Australian).

However, RBC believes the UK case will likely eventually prove unsuccessful.

“But in our opinion there is a limited prospect of this case succeeding, considering that the liabilities would cover the same reparations and compensation that has (and will) be remediated by the Renova Foundation,” the analysts added.

BHP share price snapshot

As you can see in the chart below, the BHP share price has now dipped into the red for 2023, down 5%.

Still, investors who bought six months ago will be sitting on gains of 15%.

The post Why is the BHP share price tumbling 4% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 (ASX: XJO) shares are 154 points lower this morning following tumultuous trading sessions overnight across Europe and in the United States.

Central to the stock market falls are fears that Switzerland’s second-biggest bank is in trouble and a contagion in the global banking system is underway following the collapse of two US banks over the past week.

Here are the share price movements of the big four ASX bank shares in early trading today:

• The National Australia Bank Ltd (ASX: NAB) share price is down 2.33%
• The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 2.36%
• The Commonwealth Bank of Australia (ASX: CBA) share price is down 1.8%
• The Westpac Banking Corp (ASX: WBC) share price is down 2.15%.

What’s happening with Credit Suisse?

Credit Suisse Group AG (SWX: CSGN) plummeted 24% overnight after its major shareholder refused to increase its stake in the Swiss bank following a 30% fall in the stock price over the past six weeks.

Last night’s rout prompted an automatic pause in the trading of Credit Suisse shares. The stock has now lost more than 50% of its value since 2 February and has lost half its market capitalisation since 2021.

The Credit Suisse stock plunge dragged down other European banking stocks and US banking shares overnight as fear spreads that the worldwide banking system may be on shaky ground.

This follows the collapse of Silicon Valley Bank and Signature Bank in the US over the past week.

What’s the impact on global markets?

French banking stocks Societe Generale SA fell 12.2% and BNP Paribas SA fell 10.1% overnight. Stock in German bank Commerzbank AG fell 8.7%. European government bond yields also fell.

In the US, the Dow Jones Industrial Average fell by as much as 325 points (1.03%) before rallying. The Dow is currently down 0.87% while the S&P 500 is down 0.7%.

The United Kingdom’s FTSE 100 Index fell by 3.8%, which is its biggest single day loss since the war in Ukraine began in late February 2022, according to The Australian.

The Australian quoted City Index and FOREX market analyst Fawad Razaqzada:

You get the picture: investors were panicking. Bloodbath, if you will.

Concerns over another 2008-style financial crises have intensified.

The problems with Credit Suisse

Two days ago, Credit Suisse published its 2022 annual report revealing significant customer deposit outflows.

In a letter to shareholders, Credit Suisse chair Axel P. Lehmann and CEO Ulrich Körner said:

Our financial results for 2022 were significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion, significant deposit and net asset outflows in the fourth quarter as well as the strategic actions we are taking to build the new Credit Suisse.

Net revenues for 2022 decreased by 34% year on year, driven by declines across all of our divisions.

Credit Suisse has been beset with problems for some time now.

Saudi National Bank (SNB) confirmed overnight that it would not top up its 9.88% holding in Credit Suisse due to regulatory restrictions preventing it from owning more than 10%.

The Swiss central bank has pledged to provide Credit Suisse with extra liquidity if required.

What is the Swiss central bank doing?

Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) issued a joint statement assuring markets that Credit Suisse met their capital and liquidity requirements.

They said:

The Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank SNB assert that the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets.

The strict capital and liquidity requirements applicable to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks.

If necessary, the SNB will provide CS with liquidity.

Reuters reports that European Central Bank (ECB) officials have contacted lenders it supervises to ask about their financial exposures to Credit Suisse.

The post What’s going on with Credit Suisse and why is it impacting ASX 200 shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Limited (ASX: RIO) share price is having a tough run this morning.

Rio Tinto shares are down 4.63% and currently fetching $114.01. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 1.93% in the red today.

Let’s take a look at what is going on with the Rio Tinto share price.

Iron ore price falls

Rio Tinto is not the only ASX iron ore share descending today. BHP Group Ltd (ASX: BHP) shares are sliding 3.95%, while Fortescue Metals Group Limited (ASX: FMG) shares are down 3.59%.

A fall in the iron ore price and global market fears appear to be weighing on the Rio Tinto share price today.

The iron ore price dropped amid news out of China that it would be cutting steel output. Iron ore is the major ingredient used to make steel.

China, the largest producer in the world of steel, will slash annual crude steel production in 2023, according to a report in Bloomberg.

An unnamed source told the publication China’s government will also “ban new steelmaking capacity”.

The iron ore price fell nearly 2% to US$129.90 overnight.

Rio Tinto’s listing on the New York Stock Exchange also fell 5% overnight to $65.87. Global markets struggled amid worrying news on Swiss bank Credit Suisse.

The bank’s largest investor revealed it would not raise its stake beyond 10% due to regulatory issues, Reuters reported. Commenting on the market turmoil in global markets overnight, Commonwealth Financial Network chief investment officer Brad McMillan told the publication:

The question that is in everyone’s mind is: are we headed for another financial crisis?

The S&P 500 Index (SP: .INX) dropped 0.7% in the US overnight, while the Dow Jones Industrial Average (DJX: .DJI) slid 0.87%.

Rio Tinto share price snapshot

The Rio Tinto share price has climbed 7% in the past year. In the last month, Rio Tinto shares have lost more than 7%.

Rio Tinto has a market capitalisation of about $44 billion based on the current share price.

The post Why is the Rio Tinto share price diving 5% on Thursday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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