steph Posted December 7, 2013 Share Posted December 7, 2013 Curious to know if someone is familiar with Standard Chartered Bank? 90% of their business is in Asia, Africa and the Middle East. One of the largest players in those regions. Didn't need any help during the last banking crisis. Continued to pay a dividend. 18% annual growth in eps over the last decade. Consistent ROE of 13%. 1.3 times tangible book and just once book value. PE of 10. Nice dividend. Stock is down 25% from highs due to slowdown in emerging markets, problems in South-Korea and Bale III rules which will require that they strengthen their capital base even further. Stock has never been cheaper. Over the last 20 years p/b of 2 was on the low side. (today p/b is 1). I took a first position and wanted to know if other people had remarks about this bank. THX! Link to comment Share on other sites More sharing options...
infinitee00 Posted February 3, 2014 Share Posted February 3, 2014 I agree STAN looks very attractive @ 52-wk lows with PE<12 and P/TB ~1.2. I have started to look into it but will have to dig some more. I think the sell-off in the last few months was due to its Korean write-downs and exposure to emerging markets and worries about a China crash landing. Speculation by some analysts that a drop of its core Tier one capital below 10.5% in 2014 and 2015 ( it is a 11.7% now) will lead them to raise capital has not helped the case. Also, the fact that they have guided for flat revenues and lower op. profits after 10 years of growth has made investors somewhat jittery. I think the weakening of some emerging market currencies may also take its toll on STAN's earnings in the near term. I looked at Muddy Waters/Carson Block's short thesis on STAN from last year. The crux of it seems to be that STAN is very exposed to China ( through HK) and has about a fifth of it's loans are in someway exposed to the mining sector. Block is expecting China's economy to deteriorate and STAN's loan book along with it. It seems STAN had made a few questionable loans on which they have taken heavy losses. I am not at all bullish on China and so I would have to look into this assertion some more and weigh the risks of overexposure to mining in China. However, I also like the the longer term trends of more wealth being created in emerging market economies and like STAN's advantage in those economies. I think HSBC and Citi are the only two major banks that can compete with STAN in those economies. Anyway, I need to spend more time on this but I like the fact that it's hated right now. The buyout chatter seems to have held up the stock somewhat, but, I am hoping that the chatter subsides and it gets more attractive. Would be interested if anyone has any thoughts. Link to comment Share on other sites More sharing options...
Spekulatius Posted March 8, 2014 Share Posted March 8, 2014 Standard Chartered is and UK listed bank operating mainly in Asia and Africa. The stock has become cheap relative to historical metrics - P/B is a little above one and PE around 11. The weakness appears to be due to weak business in Asia, as well as multiple compression, because emerging markets are out of favor. Yet this is a bank with a pretty good track record of organic growth as well as avoiding calamities. I bought a position recently around 1245 pence. [url=http://[http://markets.ft.com/research/Markets/Tearsheets/Financials?s=STAN:LSE][/url] Link to comment Share on other sites More sharing options...
Spekulatius Posted March 9, 2014 Share Posted March 9, 2014 Oops - looks like there was already a thread on STAN.L here. Sorry for opening up another one. In any case, the valuation looks even better now: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/standard-chartered/msg145085/#msg145085 Link to comment Share on other sites More sharing options...
Guest chai Posted November 3, 2014 Share Posted November 3, 2014 This stock just getting a lot cheaper now (PB at 0.78x) - it has really never traded this low except for a brief period Q4 2008 - Q1 2009.. At current market cap of 23bn pound, it is almost same as, says the market cap of DBS, the largest Singapore-lender which is owned by Singapore Government. Note that Standard Chartered's largest shareholder is also Temasek, the sovereign wealth fund of Singapore Government.. Is anyone else looking at this stock now? Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted November 3, 2014 Share Posted November 3, 2014 By buying this stock, you are making a macro bet on China, including Chinese property and the commodities cycle. Having seen how long it takes for crises to play out in the banking sector (it's still playing out in the US and Europe), I would think about whether Standard Chartered is really cheap enough and now is really the right timing. Link to comment Share on other sites More sharing options...
steph Posted November 3, 2014 Author Share Posted November 3, 2014 This could indeed be dead money for quite a while. I underestimated their exposure to commodities and chinese propoerty. All in all I still believe it is a wonderful franchise, but they will need time to restore confidence. Link to comment Share on other sites More sharing options...
frommi Posted November 3, 2014 Share Posted November 3, 2014 This could indeed be dead money for quite a while. I underestimated their exposure to commodities and chinese propoerty. All in all I still believe it is a wonderful franchise, but they will need time to restore confidence. By my impression we have seen just the top of the iceberg from china. Looks a bit like 2007 in the US and you know what happened to banks one year later. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now