Broker snap: Standard Chartered upgraded

3rd Mar 2011 11:03

Nomura has upgraded its recommendation for Asia-focused bank Standard Chartered following the lender's confident reiteration of a target of double-digit revenue growth in 2011.The broker ups the rating to 'neutral', from 'reduce', but queries the profitability of Standard Chartered's growth and the potential impact of policy tightening in emerging markets "which may result in weaker revenue growth in Wholesale markets and/or a rise in impairments," says analyst Raul Sinha."We are willing to value Standard Chartered's earnings at a multiple of 14 times (a premium to local peers'). However we are wary of basing valuations on the currently low level of impairments, especially given the outlook for higher inflation and interest rates in a number of the group's markets," adds Sinha.The target price is raised from 1,690p to 1,770p.