One of London's leading brokers has demanded that clients put up significantly more cash to cover derivative positions - a move which traders fear could result in millions of shares being dumped on the market today, The Telegraph reports.
MF Global informed clients yesterday that the "margin" on contract for differences (CFDs) was increasing on certain stocks from 25% to 90%. The clients have been given until this morning to put up the extra cash or close positions.
Traders fear that the move could increase market volatility as clients - unable to find the cash or transfer their investments to other brokers - are forced to close their positions.
"You are going to see a lot of forced selling," said one leading London stockbroker.
CREDIT SUISSE TODAY HIGHLIGHTED the accelerating global banking crisis by warning that it is unlikely to be profitable in the current quarter, The Guardian reports.
The Swiss bank, which appeared to have ridden out the bulk of the sub-prime disaster, said it had been profitable until the end of February but market conditions had deteriorated significantly this month.
It sugared this bitter pill by shaving Sfr200m from its initial estimates of write-downs in its investment banking division, taking them to Sfr2.86bn (£1.45bn).
JOE LEWIS, THE BRITISH BILLIONAIRE, was buying more shares in Bear Stearns just hours before the company collapsed as a result of a liquidity crisis, it was revealed yesterday, The Independent reports.
The spectacularly ill-fated share purchases meant that, as of last night, the famed currency trader had lost $1.2bn on the invest-ment, more than previously thought.
In a regulatory filing, Mr Lewis revealed that he purchased 569,000 shares at $55.13 apiece just last Thursday, the day before the bank publicly admitted it was in crisis, when Bear's trading partners were already deserting in droves.
And in comments that inflamed hopes that a better deal could yet be salvaged for Bear Stearns shareholders, Mr Lewis confirmed he would take "whatever action necessary" to protect the value of his investment, now worth barely $65m.
He said that could include soliciting an alternative bidder who might offer more than the $2 per share that JPMorgan Chase put on the table during Bear's hastily arranged bail-out on Sunday night.
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