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SoftBank shares tumbled again as investor concerns mounted over the Japanese conglomerate’s multi-million dollar high-risk bet on options tied to US tech stocks.
The group’s shares fell as much as 4.4 percent in morning trading in Tokyo on Tuesday, bringing the overall share drop for the week to more than 10 percent. The shares subsequently trimmed some of those losses to trade as low as 1.2%.
More than $ 10 billion has been wiped from the company’s market value since the Financial Times revealed that SoftBank was the mysterious “whale” that took US tech stocks to record highs through aggressive bets on equity derivatives.
“Since SoftBank is back on the radar from its epic decline [during the coronavirus pandemic] in February and March, it is worth asking if SoftBank Group is a black box and represents a systemic risk to the overall system, ”said Peter Garnry, head of equity strategy at Saxo Bank.
SoftBank’s stock slump contrasted with the broader performance of stocks in Tokyo, with Japan’s Topix index rising 0.2 percent.
Stock markets in other parts of Asia Pacific were mixed, with Australia’s S & P / ASX 200 rising 0.8% while China’s CSI 300 of stocks traded in Shanghai and Shenzhen fell 0.5%. Hong Kong’s Hang Seng lost 0.6 percent.
Losses for Chinese equities followed comments by US President Donald Trump, who late Monday raised the idea of ”decoupling” the US economy from China, saying the move would save the US “billions. of dollars”.
The British pound fell 0.2 percent against the dollar to $ 1.3143 and 0.1 percent against the euro to 1.1131 euros. The UK currency weakened nearly 1 percent against the dollar on Monday after the Financial Times reported that the UK government was planning legislation that would overturn important parts of the Brexit withdrawal agreement.
Futures linked to the S&P 500 Index were targeting a gain of 0.3% when US markets reopened on Tuesday after Monday’s close for the Labor Day holiday. London FTSE 100 futures rose 0.1 percent following the index’s 2.3 percent rise in the previous session.
Benchmark oil indices continued to struggle after falling to their lowest levels in more than a month on Monday following Saudi Aramco’s decision to cut prices for crude shipments to Asia.
West Texas Intermediate, the US marker, fell 1.9 percent to $ 39.02 a barrel, while the international benchmark Brent crude fell 0.1 percent to $ 41.96 a barrel.
