UBS announced a record additional loss of $19 billion, yet its stock rose a massive 12 per cent on the Swiss bourses. Lehman Brothers raised $4 billion via a rights issue, and its shares fell only by 2 per cent after recording a huge 18 per cent gain. Paradoxical? Not so, say analysts, who believe that the end of the sub-prime mortgage crisis may be in sight.

UBS AG, the world's largest money manager and the most adversely affected by the ongoing financial crisis, having notched up losses of $18.4 billion last year before the latest loss of $19 billion more (See: UBS announces fresh $19 billion loss; Deutsche Bank loses additional $3.9 billion), announced plans to seek 15 billion Swiss francs ($14.8 billion) in a rights offer to replenish capital.

Lehman Brothers Holdings Inc., the fourth largest securities firm, raised $4 billion from domestic investors after increasing the size of its sale to 4 million convertible preferred shares from 3 million and said demand ''significantly'' outpaced supply. Investors paid $1,000 for each Lehman preferred stock, which can convert to 20.0509 common shares once the stock reaches $49.87, or 32 percent higher than the closing price on 31 March.

The initial worry that big write-downs would impede the raising of capital has been proved completely false by the huge demand for Lehman shares. On fact, one prominent analyst said that Lehman's move ''mitigates a lot of that risk'' of a not being able to raise money.

Many analysts feel that the latest write-downs are merely the removal of bad assets from balance sheets, and the fact that the rights issues have buyers is ample proof that the credit squeeze is loosening. That is the reason why US stocks have rallied for two consecutive days, and was also on the rise today until the possibility of a recession sank in.

The chief executive officer of a well-known capital management firm with more than $5 billion of assets under management called the recent rally to be ''associated with the presumed elimination of survival risk'' and said that the market's ''getting a little more comfortable that the crisis is over''.

Sentiments have also been buoyed by a statement made by Federal Reserve chairman Ben Bernanke that no more banks are on the verge of failure, like Bear Stearns, which was recently taken over by JP Morgan after losing most of its value in a matter of days. However, his comments were tempered with his thoughts that a recession was possible in the US economy.

Both UBS and Lehman shares traded flat after their momentous gains at the beginning of this week.