Newspaper article The Evening Standard (London, England)

Standard Chartered Hits Highs on Stake Sale Talk; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Standard Chartered Hits Highs on Stake Sale Talk; MARKET REPORT

Article excerpt


TWENTY-FOUR hours can be a long time in financial markets. Just ask shareholders of international banking outfit Standard Chartered, who have been enduring something of a stop-start performance.

The whisper went round on Tuesday that the family of the late Malaysian billionaire Tan Sri Khoo Teck Puat had put his stake in Standard Chartered up for sale.

The family is the bank's thirdbiggest shareholder with almost 5% of the company, which he acquired as a white knight in the 1980s in order to block an unwanted bid for Standard by Lloyds TSB.

The story that the stake has been put up for sale is wheeled out on a regular basis by speculators, but there is little evidence to support such a move is under way at the moment. Broker UBS yesterday decided to cut its rating on the bank from buy to neutral on valuation grounds, while raising its 12-month target price from 1350p to 1400p.

UBS says the increased target price reflects greater confidence in the group's Korean prospects. But the new target still has insufficient scope in the share price to justify sticking with its buy rating.

Despite the downgrade, UBS remains confident about prospects for Standard Chartered and is forecasting an average growth rate in earnings per share over the next two years of 15% a year.

The bank now accrues more than half its revenues in either highgrowth emerging markets such as India, China and Indonesia or markets where share gains are likely.

The Standard share price has come up from 925p since the start of the year, buoyed by the strength of the Chinese economy where it has big interests. It is currently trading at record levels and nudging towards 1300p.

Housebuilder Westbury came off the boil, finishing a couple of coppers below the 560p being offered by rival Persimmon in a deal worth [pounds sterling]643 million. The City likes the deal, which may account for the subsequent rise in the Persimmon share price.

Elsewhere among housebuilders, Crest Nicholson rose 4% amid claims millionaire Gerald Ronson may be ready to bid again. He currently owns almost 24% of the shares, and an attempt at wooing the Crest board earlier this year ended in failure. …

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