Broker snap: Buy Standard Chartered, suggests Nomura

1st Aug 2011 12:51

Nomura says that Standard Chartered's premium valuation is justified, and keeps its buy rating on the stock ahead of its first half results on 3 August."The group's first half results come after a positive pre close statement in which the group indicated expectations of a strong result, including double digit growth in both revenues and profits over 1H [first half] 2010," said analyst Robert Law.The broker expects the emerging markets banking giant to deliver $3.4bn in pre-tax profit on revenues of $8.65bn, representing year-on-year growth of 10% and 9.2%, respectively. "Valuation has eased as part of the general sector as well as concerns over Asian tightening. We estimate the stock is now trading at a premium of only 3% against the sum of parts of local peers, down from double-digit percentages earlier this year. However, in a European context the stock is still trading at a substantial premium to the both the Banks sector and HSBC."The target price stays at 1,800p.At 12:51 on Monday, shares were trading 1.35% higher at 1,579p.BC