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StanChart shares upgraded by CLSA on possible white knight takeover


[HONG KONG] Shares of Standard Chartered (StanChart) were upgraded by broker CLSA on expectations the UK bank's "challenging" recovery could lead to a takeover by a white knight.

Singapore's biggest lender DBS Group would be the most likely buyer, added CLSA in a note to clients dated on Dec 17. Asia-focused lender StanChart has seen its shares fall below a forward price-to-book value of 0.5 times this week, making it an appealing target.

"The bank's road to recovery will likely be a challenging multi-year journey. But the worse the situation gets for StanChart, we believe the more likely it is that a white knight will eventually emerge," CLSA analysts Asheefa Sarangi and Lester Lim wrote in the note.

StanChart didn't immediately respond to a request for comment, while DBS officials pointed to an interview of CEO Piyush Gupta in September when he ruled out the merger of the two banks.

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Singapore state investor Temasek Holdings, the biggest shareholder for both StanChart and DBS, also declined to comment.