Shares in Standard Chartered leapt over six per cent this morning after market upgrades and traders saw the stock as a good hedge against the tumbling pound.
Bank of America Merrill Lynch (BoAML) raised its expectations of StanChart's profit before tax by 18 per cent and raised its target price for the stock to 900p from 735p.
Trading in StanChart, which is also listed on the Hong Kong's Hang Seng index, was popular overnight. The stock closed up 5.8 per cent and trading on its primary listing in London has picked up where Asia left off.
17 January 2017 @ 9:15amStandard Chartered (STAN)
Analysts added the Trump administration could benefit StanChart. BoAML said it had "the potential for StanChart to seek a merger".
Meanwhile, Goldman Sachs yesterday increased its price target by eight per cent. Also upgrading HSBC, the US investment bank said the positive sentiment reflected "lower-than-expected volatility since we raised assumptions post Brexit".
A good hedge?
With the pound faltering in trading in advance of Prime Minister Theresa May's eagerly awaited Brexit speech today, markets also see StanChart as a good hedge against the pound. Shuli Ren wrote on Barron's Asia blog.
A hard Brexit is generally considered bad for London’s banks but buying Standard Chartered and HSBC, who earn a majority of their profits in Asia, can be a good hedge against the struggling currency.
StanChart also announced it had closed deals to provide loans to three shipping firms worth a total of $1.6bn (£1.3bn).
The deals include in a $685m 12-year facility for BW Gas JuJu LNG, a joint venture between BW Group and Japan's Marubeni, a $350m Islamic facility for National Shipping Company of Saudi Arabia and a $572m loan to subsidiaries of India's Reliance Group.