Standard Chartered share price braces for important news

Standard Chartered (LON: STAN) share price has been in the spotlight in 2023 amid rising hopes that the British bank will be acquired. The stock jumped to a high of 798p in January, the highest point since August 2015. It has jumped by ~34% in the past 12 months and outperformed the SPDR Bank ETF (KBE), which has dropped by ~12.95%. The stock has also done better than other British banks like Lloyds and Barclays.

Standard Chartered acquisition rumours

Standard Chartered, popularly known as Stanchart, is a British bank that mostly focuses on the emerging market. It has a strong presence in the UK and Hong Kong Kong. In 2021, the company’s operating income in Asia was $10.4 billion followed by Africa and the Middle East, where it made $2.4 billion. Its Europe and Americas business brought in over $2 billion.

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Standard Chartered has made the biggest bank news of the year after rumours said that First Abu Dhabi Bank was considering making a bid. We wrote about these rumours here. According to the Financial Times, the bank has already completed its due diligence and is planning to make a bid of between $30 billion and $35 billion. In a statement last week, the bank raised concerns about the bid.

This will be an important week for Stanchart since the bank is scheduled to deliver its results on Thursday. As such, there is a possibility that these acquisition rumours will intensify, especially if the company publishes strong results. 

Stanchart earnings ahead

To a large extent, the bank makes a good acquisition target because of its exposure to China and fast-growing economies in the Middle East. The management is also working to restructure the company by exiting some unprofitable markets. Also, it has a solid balance sheet, with a Common Equity Tier 1 ratio of 13.6%. Also, it is also relatively cheap, with a price-to-book ratio of 0.58.

Stanchart had a strong performance in the last quarter as its net interest income grew to $1.93 billion. Other income rose to $2.3 billion while profit attributable to shareholders came in at over $976 million. 

Analysts expect that Standard Chartered did well in Q4. They believe that its net interest income rose o $2 billion while other income was $1.7 billion. The common equity tier 1 ratio is expected to be 13.5%

Standard Chartered share price forecast

Standard Chartered share price
Standard Chartered share price

On the daily chart, we see that the STAN stock price has been in a strong bullish trend in the past few months. It moved above the key resistance point at 631p, the highest point in May, June, and September. The shares have remained above the 25-day and 50-day moving averages while the MACD remains above the neutral point.

Therefore, the stock will likely continue rising in the coming days as buyers attempt to move above the year-to-date high of 796p. A drop below the support at 700p will invalidate the bullish view.