Broker snap: StanChart remains on track, says Investec

2nd May 2012 09:46

In spite of the negative market reaction to Standard Chartered's first-quarter update on Wednesday morning, Investec has maintained its positive view on the bank saying that it sees a 'very clear buying opportunity'.The group boasted a "strong start" to 2012, helped by continued momentum in the balance sheet and well diversified income streams. Notwithstanding foreign exchange headwinds, Investec says that Standard Chartered achieved 8-9% revenue growth in the first three months of the year."Ahead of today's 'no numbers' Q1 interim management statement, the market had developed cold feet -consensus expectations anticipate a slight miss against FY12 guidance of double-digit revenue and earnings per share growth whereas, in our view, all evidence suggests that STAN remains comfortably on track," the broker said."Moreover, as anticipated, the real debate isn't about whether STAN can make the numbers, but rather what to do with its substantial emerging surplus - today it launches an accelerated investment programme. We see a very clear buying opportunity." Investec has kept its 1,800p target price unchanged.Nevertheless, shares were trading 2.71% lower at 1,471p by 10:29 this morning.BC