Shares in SoftBank dropped again as investor unease mounted over the Japanese conglomerate’s high-risk, multibillion-dollar bet on options tied to US technology stocks.
The group’s stock fell as much as 4.4 per cent in morning trading in Tokyo on Tuesday, taking the shares’ total decline for the week past 10 per cent. Shares later trimmed some of those losses to trade down 1.7 per cent.
More than $11bn has been wiped from the company’s market value since the Financial Times revealed that SoftBank was the mystery “whale” that drove US tech stocks to record highs through aggressive bets on equity derivatives.
“Given SoftBank is back on the radar since its epic decline [during the coronavirus pandemic] in February and March, it is worth asking the question whether SoftBank Group is a black box and poses a systemic risk to the overall system,” said Peter Garnry, head of equity strategy at Saxo Bank.
The drop in SoftBank’s shares contrasted with the broader performance of markets across Asia Pacific on Tuesday morning. Japan’s Topix index rose 0.2 per cent while Australia’s S&P/ASX 200 climbed 1.3 per cent.
China’s CSI 300 of Shanghai- and Shenzhen-listed shares added 0.3 per cent while Hong Kong’s Hang Seng added 0.6 per cent.
Traders largely shrugged off comments from US President Donald Trump, who late on Monday floated “decoupling” the US economy from China, saying the move would save America “billions of dollars”.
Futures linked to the S&P 500 index point to a gain of 0.4 per cent when US markets reopen on Tuesday after being shut Monday for the Labor Day holiday. Futures for London’s FTSE 100 were up 0.2 per cent following the index’s 2.3 per cent rise on Monday.
Oil benchmarks continued to struggle after dropping to their lowest levels in more than a month on Monday following Saudi Aramco’s decision to cut prices on crude shipments to Asia.
West Texas Intermediate, the US marker, fell 1.7 per cent to $39.09 per barrel, while international benchmark Brent crude was flat at $42.01 per barrel.
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September 08, 2020 at 09:16AM
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SoftBank shares fall again on concerns over huge options bet - Financial Times
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