Standard Chartered has been under pressure recently, being forced to issue a statement last week backing its top executives and warning last month of a 20% fall in profits this year.
But its shares have added 25.5p or 2% to £12.48 after a positive note from JP Morgan Cazenove. It said:
We are upgrading Standard Chartered to overweight from neutral following the material underperformance (around 27% relative to STOXX Europe 600 Bank Index) over the past year, as we foresee stabilising pressures in a number of key operations within India, Korea and parts of wholesale banking.
Since the second quarter of 2013, continuing negative earnings surprises have driven a valuation discount relative to peers (and underpinned our cautious view) leading to fundamental concerns on growth and asset quality. In our view, some of the earnings headwinds facing the group could start to abate from end 2014, and with consensus now re-based lower, we see risk reward geared to the upside. We raise 2016 earnings per share by 9% and our December 2015 price target to £14.50 (from £13.50).
