The share price of Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ) shareholder Koor Industries Ltd. (TASE:KOR) and its parent company, Discount Investment Corporation (TASE: DISI) have fallen sharply, after the Swiss National Bank urged Credit Suisse improve its capital adequacy by halting dividends or issuing shares to raise cash to shield it from the risk of an escalation of the euro zone banking crisis. Credit Suisse's share price fell 8.1% on the Zurich Burse by midday today to CHF 17.47, and falling 7.8% in premarket trading in New York to $18.28.
Koor's share price fell 6.9% by mid-afternoon to NIS 42, giving a market cap of NIS 2 billion, Discount Investment's share price is down 3.9% to NIS 7.83, giving a market cap of NIS 666 million, and the share price of its parent company, Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH), fell 5% to NIS 13.25, giving a market cap of NIS 613 million.
The news is a blow to Dankner, as Credit Suisse is an important holding for Koor. The drop in Credit Suisse's share price brings it to with 20% of the margin call of CHF 14, set by Koor's lenders. The possibility that Credit Suisse will stop distributing dividends is another blow to Koor, which relies on them for its profits.
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2012
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