Broker snap: Nomura encouraged by Standard Chartered statement

8th Dec 2011 09:00

Nomura stays confident over prospects for emerging markets-focused bank Standard Chartered, saying that the overall message in the pre-close trading update is "relatively encouraging to us in the current global environment.""The company is happy with consensus, impairments are lower than expected with positive operating leverage and the only potential negative being a modest reduction in top-line revenue guidance, which is not surprising in our view," Nomura said.However, Standard Chartered said its income for 2011 is now expected to grow at "just below a double digit rate" after a depreciation in Asian exchange rates against the dollar. Previously the bank forecast double digit revenue growth, but it had been hit by Asian exchange rates falling by up to 5% since its third quarter statement. Nevertheless, the broker says that while the valuation - shares trading at 11.5 times current earnings - is at a significant premium to developed market banks, "these premiums as likely to be sustained given the fewer uncertainties we see in the group's main markets and its longer-term growth prospects."A buy rating and 1,800p target are retained.BC