UBS is getting twitchy about emerging markets specialist bank Standard Chartered, downgrading the stock to sell.

StanChart shares have shot over 40 per cent higher from their low point in February, reflecting a generally much more supportive climate in emerging-market economies and assets.

But UBS reckons that leaves the UK-listed bank “exposed”. It writes:

With many funds short or underweight at the start of the year, commodity prices regaining some poise, EM equities rallying and EM funds seeing a return to inflows, a rally is directionally easy to rationalise.

But the StanChart rally has happened against a ~60% fall in consensus profit forecasts for this year and 30% decline for next. Our estimates are unchanged and so is our view: we see great businesses within StanChart – predominantly Transaction Banking, Financial Markets and bits of Retail – but we think the headwinds of de-risking, deleveraging, and flat and low yield curves will combine with elevated loan losses to make life particularly difficult near term (we forecast a loss for this year), leaving the 8% ROE target for 2018 out of reach.

UBS expects the share price to fall to 430p within 12 months.

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