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Standard Chartered surges after shareholder expresses confidence
[HONG KONG] Standard Chartered Plc, the UK lender that's eliminating thousands of jobs, surged the most since 2013 after shareholder Aberdeen Asset Management Plc called it a "very good bank" and reiterated its support for the company.
The shares jumped as much as 5 per cent in Hong Kong, the biggest intraday gain since since September 2013, and traded at HK$107.90 as of 11:29 a.m. local time on Wednesday. Aberdeen Chief Executive Officer Martin Gilbert made his comments in a conference call on Tuesday.
Singapore's Temasek Holdings Pte and Aberdeen, the two largest shareholders, have pressed for the replacement of Chief Executive Officer Peter Sands, a person familiar with the matter said last month. Sands, 53, has struggled to restore investor confidence after slowing economic growth in Asia and rising costs for bad loans prompted the bank to cut its earnings forecast three times in 2014.
Aberdeen's "positive" stance "might possibly reflect their optimism about a future senior management change," Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by e-mail.
Sands pledged on Jan 8 to eliminate 4,000 jobs, shut equities trading and save about US$400 million in expenses, in the bank's most aggressive cost cuts to date.
Aberdeen is "sending a positive message to other investors," Ronald Wan, chief China adviser at Asian Capital Holdings Ltd, said in Hong Kong by phone today. "However, the bank's fundamental problems are still there."