Broker snap: Standard Chartered a 'buy', says Investec

4th Dec 2013 11:00

Investec said it sees a "clear positive outlook" for Standard Chartered in 2014 despite the company saying it expects flat annual revenue.In a trading update on Wednesday, the financial services firm admitted a challenging year had resulted in a significant impact on its performance in the second half and as such income for the full year is expected to be broadly flat on 2012.It said currency depreciation would reduce income and profit growth by around 1%, while costs were expected to rise by a "low single digit percentage".The net interest margin for the group has been "slightly" down on last year, with high levels of liquidity in many of its markets affecting margins.However, Investec recommended a 'buy' rating, saying it sees a brighter year ahead, driven by a sharp re-acceleration in wholesale banking revenues with substantially curtailed margin and "own account" headwinds. "Today's news is poor, but the outlook, underpinned by a strong pipeline and greater margin stability, appears robust," the broker said."On 9.1x 2014e EPS, it is the UK's cheapest bank which, in our view, remains an anomaly."RD