Standard Chartered: The Year that Macro Bites?

Jeffries has lowered its price target for Standard Chartered from 730p to 722p (currently trading at 931p), arguing that the idiosyncratic risk behind the original Underperform rating will be exacerbated by macroeconomic headwinds in the emerging markets where Standard Charteredis most active. This could force STAN to de-risk since it only has 10.5% tier 1 common equity, while TSB Banking, Lloyds Banking, and the Royal Bank of Scotland all have more than 15%.

“In our view, it is untenable that the UK-listed and regulated bank with the greatest prospective intermediate-term tail risk emerges with the lowest estimated CET1 ratio in 2016,” writes Jefferies analyst Joseph Dickerson.

Jefferies was already bearish on Standard Chartered

Dickerson’s bearishness on Standard Chartered stems first from...