Bank stocks sold off globally, American "sharks" poured money "bottom-fishing"


The collapse of Silicon Valley Bank (SVB) sent global banking stocks plunging.

The collapse of SVB followed the collapse of the virtual currency bank Silvergate Bank and was followed by the collapse of another bank, Signature Bank, just two days later, causing global financial markets to fluctuate wildly in the past few days.

Investors' worries have not disappeared after Washington allowed banks to access additional capital. Many investors fear the impact of SVB's collapse will spread to other markets around the world.

On March 15, the focus shifted from the US to Europe, where Credit Suisse led a sell-off in banking stocks after the Saudi government, Credit Suisse's largest shareholder, declared it could not provide additional financial support to this bank due to regulatory requirements.

Despite efforts to reassure investors, shares of Credit Suisse fell more than 24%, dragging the European bank stock index down 7%. During the session, at one point, Credit Suisse stock fell 30%. Credit Suisse default swaps (CDS) prices rose to an all-time high.

It was these factors that made investors panic, causing bank stocks to sell off globally. However, American billionaires and investment funds saw this "once in a thousand years" opportunity and decided to pour billions of dollars to catch the bottom of bank stocks.

After the collapse of Silicon Valley Bank, billionaire fund manager Ken Griffin bought more shares in another bank that has also seen shares plunge in the past few days. According to a filing with the SEC, Citadel currently owns a 5.3% stake in Western Alliance Bancorporation. The Arizona-based regional bank saw its share price drop by as much as 90% following the SVB crash last week.

Previously, Citadel held 1.3 million shares in Western Alliance Bancorporation at the end of 2022 and now owns nearly 6 million shares, which is 4 times more than the original. Billionaire investor Ron Baron recently told CNBC that he is "modestly increasing his position" in Charles Schwab as the company's stock price has dropped more than 30% in the past few days. For some investors, this is also the time to return to banking stocks but with a cautious attitude. Anson Fund, which manages $1.6 billion, bought some shares of First Republic Bank on Monday. According to Deputy Portfolio Manager Rob Mills, “this is not a credit crisis, it is a liquidity crisis. First Republic already has JPMorgan 'injecting capital' when needed." Meanwhile, billionaire Bill Ackman, who runs the hedge fund Pershing Square, said on Twitter on Monday that regional banks are now a surprise "bargain" given the timely government intervention. The billionaire also mentioned the risks of making these transactions, but said that other big investors are also pouring money to seize the opportunity. However, Pershing Square does not invest in the banking sector.

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