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Business News/ Markets / Stock Markets/  Sinking Credit Suisse stock is a ‘buy for the brave,’ says Citi
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Sinking Credit Suisse stock is a ‘buy for the brave,’ says Citi

Citigroup Inc analysts informed that shares of Credit Suisse Group AG are now falling in ‘buy for the brave’ category ahead of its strategic plan to be unveiled at the end of October

Credit Suisse Group AG shares are now a “buy for the brave,” said Citigroup Inc. analysts (Bloomberg)Premium
Credit Suisse Group AG shares are now a “buy for the brave,” said Citigroup Inc. analysts (Bloomberg)

Credit Suisse Group AG shares are now a “buy for the brave," said Citigroup Inc. analysts on Monday, as the Swiss bank’s stock plunged to a fresh low.

A closely-followed gauge of credit risk for the bank is at record high, even after its Chief Executive Officer Ulrich Koerner had sought to calm employees over the weekend. The word of reassurance came ahead of Credit Suisse’s strategic plan -- on possible asset and business sales -- to be unveiled at the end of October.

There remain reasons to be cautious, according to Citi analysts. “We do see significant execution risk in any new strategic plan," wrote Andrew Coombs, who is one of four analysts with a buy rating on the stock. Elsewhere 15 others have a hold and nine have sell, according to Bloomberg data.

Also read: Credit Suisse hit with historic money laundering conviction

Markets seemed to be pricing in a “highly" dilutive capital raise, added Coombs, in a note titled “This is not 2008." Credit Suisse Turmoil Deepens With Record Stock, CDS Levels

Indeed, Deutsche Bank AG analysts in August said Credit Suisse faces a capital gap of at least 4 billion Swiss francs ($4 billion) to improve its financial strength, fund its restructuring and support growth.

 

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Published: 03 Oct 2022, 04:41 PM IST
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