Fire Sale on Wall Street, Archegos and Nomura’s heavy losses
On Friday there were mass sales on Chinese tech and media companies with very heavy losses that accelerated what had happened in the previous days. Let's see both the Chinese tech index and Viacom, to understand the extent of the fall:
here is Viacom
This sudden sale hit everyone, including Goldman Sachs and Morgan Stanley and Nomura, which we'll talk about later. It took several hours to find out what had happened, who had started this liquidation of the shares which led to an overall loss of 33 billion dollars.
On Saturday it became known that behind this chaos was Bill Hwang's Archegos Capital Management fund, which had come under pressure in the previous days due to accumulated losses and forced into a sudden sale. This started a mass sale with very heavy losses, which we have talked about, which first of all hit Archegos Capital, whose site is now online and, apparently, without any response to the informative emails sent. After all, Archegos was the largest holding of Viacom and Discovery shares.
So many investors have lost their feathers at this point. Among these certainly Nomura, which had to admit its exposure for at least 2 billion.
Nomura owns at least 10 billion Chinese GXS technology stock, among the shares Hwang sold most aggressively. A trader, as it transpires, will be the scapegoat for having strongly exposed himself on this title through swaps.
The blow on the stock market for the Japanese bank was very strong, with -16% in Tokyo.
A good shot, no doubt about it. The danger is that Hwang's initiated sale is not over yet, but may continue today, taking with it a part of the financial sector that supported him. Yet in the days before the sale of the losing High Tech titles he had to make it clear that something had broken …
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article Fire Sale on Wall Street, Archegos and Nomura's heavy losses comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/fire-sale-a-wall-street-archegos-e-le-forti-perdite-di-nomura/ on Mon, 29 Mar 2021 07:25:22 +0000.