Long/short equity, medium-term horizon, value, growth

Standard Chartered's Low Valuation Seems To Be Justified

Standard Chartered's (OTCPK:SCBFF) shares have fallen 9% in the year to date, amidst a surprise profit warning last month and increasing concerns over rising bad loans. The depreciation of emerging market currencies against the US dollar has been a major contributing factor to the decline in earnings, but structural and cyclical factors are more disconcerting. The bank is facing pressures from slowing growth in loan demand, increasing loan impairments and falling investment banking revenue. With growing investor discontent, there have been boardroom succession concerns, following the departure of Richard Meddings, its finance director, and Steve Bertamini, the head of its consumer banking business. On top of this, competition is steadily rising in many of its markets, and concerns...

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