Broker snap: Investec plays down capital concerns at StanChart

11th Dec 2013 09:52

Investec has lowered its target price for Standard Chartered but has retained its 'buy' recommendation, saying that it doesn't see any capital issues at the emerging markets-focused lender."STAN's unexpectedly weak fourth-quarter revenues in financial markets have sharply impacted the 2013e outturn and materially impaired market confidence in relation to the scale and pace of recovery in 2014e and beyond," said analyst Ian Gordon."Whilst understandable, we continue to believe that the case for a strong Wholesale Bank-led re-acceleration in revenues remains intact, albeit from a lower base than envisaged."Factoring in this, the broker has reduced its target price for the stock from 1,900p to 1,700p.However, Gordon said that the recent debate about capital which has weighed on the share price in recent weeks has been "contrived", highlighting that the bank's fully loaded Basel-3 core tier-1 capital ratio stood at 10.5% in June - "the strongest of any UK bank"."We expect sufficient visibility to emerge by Q1 2014 to drive both consensus upgrades and a re-rating. We see no capital issue at all."The stock was 0.27% higher at 1,287.5p by 10:21 on Wednesday.BC