Anxious traders strategize for market turmoil on Monday

(Bloomberg) — With the fate of Credit Suisse Group AG finally decided, investors braced for another heartbreaking week of trading.

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Just hours before the Asian markets opened, money managers were talking to nervous clients, planning strategies and organizing their next trades. Many have booted up their workstations from home, settled in for a late night, and made plans to be in the office before sunrise.

“In the last hour I’ve already had a few calls with fund managers and a large client,” said Alberto Tocchio, fund manager at Kairos Partners in Milan. “From now until late at night I’ll be hanging on to the news, trying to figure out what to do early in the morning.”

While news of UBS Group AG’s acquisition of Credit Suisse has eased some traders who feared going into Monday without a deal, there is still much unrest on Wall Street. The turmoil at Credit Suisse and the collapse of three regional lenders have raised concerns about the health of the banking industry and brought back memories of the 2008 financial crisis.

‘Unknown unknowns’: No weekend for traders as banks’ troubles continue

Credit Suisse shares have been hit by a spiral of negative news in recent years, with the stock plummeting 98% from its 2007 peak, representing a nearly $90 billion decline in market cap over that period. Another sell-off in shares of the Swiss lender last week – following the collapse of three US regional banks – triggered a 12% plunge in the European Banking Sector Index over the course of the week.

Individual customers and institutions are increasingly concerned about where their money is being held, said Mark Grant, chief global strategist at Colliers Securities. He said he was urging clients to adopt conservative stances because of the instability he saw in the financial system, which had been created by soaring central bank interest rates.

“I received a lot of calls from customers and institutions over the weekend,” he said. “We’ll see how things are tomorrow morning but I don’t expect them to be too good.”

Anthony Cohen, a senior listed derivatives broker at Market Securities, takes calls from clients wishing to trade on the market open. “I have never seen such volatility in bonds and stocks before,” he said from Dubai. “However, I still don’t feel any panic in the way customers act.”

For other traders, the turmoil means opportunities. Andrea Tueni, Saxo Banque’s head of sales trading, said he was excited about the chance to start trading on Monday.

“Personally, I think it’s quite nice when something’s going on,” he said. “Of course nobody is happy that it is hard for some. But the market environment before that was flat with a combination of inflation, recession and central banks and it was pretty repetitive.”