UBS shares edge up after US deal

UBS's share price rose by 0.7 per cent to 16.85 Swiss francs in early trading (0744 GMT).

UBS’s share price stuttered ahead on Thursday after the announcement of a deal to settle a bruising US government lawsuit,while Swiss authorities decided to sell their stake in the troubled bank.

UBS’s share price rose by 0.7 per cent to 16.85 Swiss francs in early trading (0744 GMT),lagging behind the general rise in the Swiss Market Index of 0.9 per cent.

“The evolution is still volatile because of speculation over the state’s holding,” a Zurich trader said.

The Swiss government announced overnight that it would convert the nine per cent or six billion Swiss franc holding it took last October under a rescue plan to prop up the country’s banking flagship in the financial crisis.

The resulting 322.2 million shares will be sold to institutional investors,the Federal Council said in a statement.

The loss-making banking heavyweight was one of the hardest hit as credit markets froze and stock markets slumped last year in the wake of the collapse of US bank Merril Lynch.

“The Board of Directors and the executive management of UBS would like to thank the Swiss Confederation,the Swiss National Bank and (financial regulator) FINMA for their prudent and resolute course of action from October 2008 to this day,” UBS Chairman Kaspar Villiger said in a statement.