Embattled UBS wraps up bumper rights issue
Written on June 14, 2008
UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) has wrapped up a 16 billion franc ($15.4 billion) rights issue, the Swiss bank’s second effort to resuscitate finances ravaged by the global markets crisis.
It is the latest in a line of major banks including Britain’s Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) and France’s Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) to go cap in hand to shareholders. In total, European banks are raising more than $40 billion from shell-shocked investors.
UBS said on Friday 99.4 percent of the issue, priced at 21 francs, was taken up.
UBS shares were up 1.7 percent at 24.74 francs by 0737 GMT, outperforming the DJ Stoxx European banking index, which was down 0.4 percent, but since the start of the rights trading, they have tumbled by about 13 percent.
“It (the stock price) has been weak ever since they announced the rights issue,” said Peter Thorne, an analyst with Helvea quick payday loan payday loans online. “UBS hasn’t got a lot of fans.”
UBS, once a rock of Swiss financial prowess, is now Europe’s biggest casualty of the financial crisis sparked by U.S. mortgage defaults, having written $37 billion off its credit investments, twice the figure at Royal Bank of Scotland.
There are also signs that its prized wealthy clientele are growing nervous; money flows into its wealth management business slowed to a trickle in the first three months of the year.
Dieter Ewald, a fund manager at UBS shareholder Frankfurt Trust, said such concerns had prompted him recently to pare back his investment in the Swiss bank.
Filed in: legal.