Fundamental Analysis Friday 20 March 2023

Author: Steve Tee


Swiss banks are hitting the headlines and yes, we must pay attention. What happened to Credit Suisse is not breaking news anymore. However, now their competitor UBS is coming in to save them. A deal has been struck by UBS and Swiss regulators to buy Credit Suisse for approximately $3.5B Swiss Franc. Funny thing is, Swiss National Bank, steps in to inject liquidity line of $100B Swiss Franc into this deal. Don’t seem like UBS is very capable to buy over by themselves. Credit default swap for UBS will definitely widen and that indicates higher risk to insure UBS.


Xi’s administration is making strides in Middle East. Never comes a day that we would imagine Iran and Saudi Arabia to shake hands and come to a middle ground of diplomatic relations. Thanks to China’s Wang Yi (Director of Office of the Central Foreign Affairs Commission) as the mediator to broker a deal between these two ex-rival nations, now becoming a powerhouse in collaboration. The BRICS is moving at record pace in establishing partners and dominance across the Asia and Middle East continent. Over the weekend, breaking news of Mexico being the latest country to apply to be part of BRICS nation send shockwaves to the global markets, especially USA. China’s dominance across the Pacific is widening day by day and Latin America is lining up hop on the BRICS bandwagon. Expect heavier gold buying because seem like a new world reserve currency backed by commodities (e.g. gold) is rising fast. Turkey recently bought record amount of physical gold (23 Tonnes) from Switzerland in Jan 2023, reported by Bloomberg. De-dollarization efforts are speeding up and with the banking crisis looming right now, it will just get turbo-charged in coming weeks & months.