Standard Chartered Rises After Yellen Calms Global Growth Fears

  • Standard Chartered leads gains among major British lenders
  • CEO Bill Winters raised $5.1 billion in share sale this month

Standard Chartered Plc jumped the most since March after U.S. Federal Reserve Chair Janet Yellen raised interest rates for the first time in almost a decade, allaying concerns over faltering global growth and whipsawing commodity markets.

The London-based bank, which generates most of its earnings in Asia, soared as much as 8.1 percent, leading gains among major British banks, after the Fed increased borrowing costs by a quarter point on Wednesday. Yellen signaled the pace of subsequent increases will be “gradual,” in line with projections.

Standard Chartered Chief Executive Officer Bill Winters, 54, raised about $5.1 billion in a rights offering this month to bolster capital as part of a plan to restore profitability at a bank reeling from losses tied to bad loans after commodity prices slumped and economies from China to India cooled. The stock has slumped about 40 percent this year.

“It ticks every box,” said David Moss, who helps oversee about $237 billion of assets at BMO Global Asset Management in London. “They had been short of capital, now the Fed move has improved sentiment to the sector and to emerging markets, so they’re rallying more than most.”

Following the completion of the rights issue and scraping through a stress test from the Bank of England, capital concerns at the lender have “been addressed” by Winters, analysts at JPMorgan Chase & Co. led by Raul Sinha wrote in a note to clients.

“Standard chartered has been the standard bearer for the emerging-market slowdown all the way down,” said Sandy Chen, an analyst at Cenkos Securities Plc in London with a buy rating on the shares. “If emerging-market stocks with exposure to a U.S. recovery begin to rally, you can expect that Standard Chartered would lead the rally as well.”

HSBC Holdings Plc, which also generates most of its earnings in Asia, rose 2.6 percent in London, paring losses this year to about 12 percent.

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