Temasek will wait before deciding on StanChart stake

Standard Chartered got a boost from a report that a sovereign wealth fund was willing to give it more breathing room to successfully complete its turnaround, before deciding what to do with its stake in the lender.

Reuters reported that, for the moment, Singapore´s SWF, Temasek, would hold off from deciding the fate of its approximately £2.6bn stake in the Asia-focused lender.

In a vote of confidence for the bank, in a research note sent on 16 December analysts at JP Morgan said that following the recent successful $5.2bn rights issue and after the Bank of England´s stress tests, in their view investors´ capital concerns had been adressed.

Trading on 0.6 times price-to-tangible net asset value, StanChart shares were reflecting a downbeat outlook for the banks´ non-performing loans in emerging markets. However, the stock price was not discounting the now lower downside risks and positive earnings gearing to higher US rates from chief Bill Winter´s new strategy.

JP Morgan analyst Raul Sinha reiterated his 'overweight' recommendation and 870p target price on the shares.