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Archegos margin call share dump ripples across markets

Apr 1, 2021

NEW YORK (Reuters) – Nomura and Credit Suisse are facing billions of dollars in losses after a U.S. hedge fund, named by sources as Archegos Capital, defaulted on margin calls, putting investors on edge about who else might have been caught out.

Losses at Archegos, run by former Tiger Asia manager Bill Hwang, had triggered a fire sale of stocks on Friday, a source familiar with the matter said.

The S&P 500 was off 0.1%, paring losses seen in futures over night. The news has sparked fears that other lenders could be in the process of exiting these positions too. The S&P Financials index was down about 1.0% and the Banks sub-index was off 1.9%.

COMMENTS:

SIMON CARLTON, CHIEF EXECUTIVE OFFICER, CARLTON JAMES GROUP, LONDON (email)

“The Archegos events tell a story about one of the fundamental issue with the stock market and the intrinsic connection throughout. The self-fulfilling prophecy of these margin calls are yet another indication that we may see a double dip recession on the horizon as the pandemic lifts its hold on the global economy. Prepare for very bumpy ride over the next few years.”

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