Asia markets trade higher as investor fears on banking turmoil ease

Hong Kong’s trade deficit has almost doubled to HK$45.37 billion ($5.78 billion) in February, compared to January’s figure of HK$25.37 billion.

Data from the economy’s census and statistics bureau showed that imports in February dipped 4.1% year-on-year to HK$331.57 billion, while exports fell 8.8% compared to the same period the year before at HK$286.2 billion.

Hong Kong’s total trade value for February came in HK$617.77 billion, compared to HK$659.69 billion in February 2022.

— Lim Hui Jie

Australian Prudential Regulation Authority chairman John Lonsdale, said the country’s banking system is “among the best equipped in the world to handle a crisis.”

Speaking at a banking summit, Lonsdale pointed out that Australia’s banks have higher capital requirements and a narrower range of definitions of high-quality liquid assets compared to its global peers.

Most notably, Australia is the only jurisdiction in the world that mandates banks carry capital to address the risk of rising interest rates as part of their core capital requirements, referred to as interest rate risk in the banking book, he said.

“Some banks had expressed displeasure about the application of capital for IRRBB, but two weeks ago the IRRBB requirement proved its worth,” Lonsdale said, referring to the collapse of Silicon Valley Bank and its exposure to rising interest rates.

Still, Lonsdale noted, in light of SVB’s rapid fallout, Australia’s regulators may need to look at whether the regulatory framework needs strengthening.

“As the speed of crises has accelerated, regulators have less time to respond than they once did. We can no longer expect to have days or weeks to debate and plan considered responses,” he said.

“We need to be ready to act quickly, but we also need greater confidence than ever in the prudential safeguards we have in place.”

— Lim Hui Jie

The market sell-off earlier this month has hurt small-cap stocks more than their larger peers.

Yet Josh Bennett, senior portfolio manager at Alger, believes the volatility has created opportunities for investors to pick stocks that will outperform in the medium to long term.

Bennett named three stocks that he says are likely to have resilient earnings through a potential recession.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Despite the market volatility, Morgan Stanley upgraded a raft of stocks in March, including both U.S. and global picks.

The bullish calls spanned tech, pharmaceuticals and more, with the bank giving one stock a double upgrade. Here are five of the stocks upgraded by the investment bank:

CNBC Pro subscribers can read more here.

— Weizhen Tan

Jack Ma, the billionaire co-founder of Chinese e-commerce giant Alibaba, returned to China after roughly one year away, according to a Wall Street Journal report citing people familiar with the matter.

Ma, who was largely gone from public life after altercations with Chinese regulators, was the subject of speculation following his disappearance. According to the report, Ma spent most of the past year in Japan before recently returning to China. He was also recently in Hong Kong, Singapore and Australia.

Alibaba shares were up 0.5% in Monday premarket trading.

U.S.-listed shares of Deutsche Bank were higher in premarket trading on Monday. The stock added 3.6% before the opening bell after declining 3.1% on Friday.

Citi maintained its buy rating on the stock, despite continuing worries toward the health and stability of the overall banking sector. German Chancellor Olaf Scholz largely dismissed concerns that Deutsche could be subject to fallout similar to Credit Suisse, saying that the firm is still “very profitable” and “fundamentally modernized.”

Still, Deutsche stock is still under pressure as investors weigh whether a true end is in sight contagion in the banking sector. Shares are down nearly 19% year to date.

— Brian Evans

In an effort to give First Republic Bank more time to get its finances in order, U.S. regulators are considering expanding an emergency lending facility, Bloomberg reported over the weekend.

The move would apply to all banks but especially could aid First Republic, which has had problems with assets similar to those that toppled three other regional banks. First Republic has remained open but concerns have grown over its operations and its stock has plunged.

Discussions are in an earl stage over expanding the Bank Term Funding Program, and any expansion would apply to all banks.

First Republic shares soared more than 28% in premarket trading Monday. The stock is down nearly 90% over the past month.

—Jeff Cox

Movement of deposits from small banks to giants like JPMorgan Chase and Wells Fargo has slowed in recent days, sources told CNBC.

Customers have grown increasingly skittish following the closure of Silicon Valley Bank, which ignited a crisis in the bank sector. While the crisis has pushed some to move their deposits to bigger banks that they see as less likely to be subject to a bank run, that trend has slowed over recent days, according to sources familiar.

That gives regulators time to address strains in the U.S. banking system as investors and customers alike wonder if contagion could spread.

— Hugh Son