Investec’s Mundy: I missed an opportunity in Standard Chartered

Alastair Munday 200

Investec UK Special Situations manager Alastair Mundy says that he missed an opportunity to buy Standard Chartered when the price fell and is waiting for it to get cheaper once again before he buys the bank’s shares.

The manager, who runs the £703m Investec UK Special Situations fund, says that he should have bought Standard Chartered when its price fell following allegations of a £160bn money laundering scheme with Iran.

Standard Chartered saw its shares plunge over 24 per cent following the news. The stock rose following the firm’s agreement to pay £217m to New York regulators to settle claims. It is currently trading at almost £15 a share.

He says: “We missed a chance to buy Standard Chartered when the share price fell. We are waiting for valuations to look attractive to buy it.”

Mundy explains that Standard Chartered, where the majority of its profits come from emerging markets, is in a good competitive position, as smaller Asian banks are struggling to keep up with loan demand.

He says: “These banks have lots of deposits and their loan books have grown so strongly. So they have got a balance in the ratio of deposits to loans, where as with Standard Chartered, it has a surplus of deposits to lend out.”

Other managers who took advantage of falls in the share price to snap up Standard Chartered is SVM Asset Management’s Neil Veitch, who runs the £83m SVM UK Opportunities fund, and Guy De Blonay, who runs the £463m Jupiter Financial Opportunities fund. Veitch bought the stock when it dropped to below £13 a share.

Mundy also recently bought Royal Bank of Scotland. His only other bank position is HSBC.

He says: “We have been vocal about not buying the other banks, like Barclays and Lloyds, as it is hard to say what was in the balance sheets. RBS has cleaned up its balance sheets and sold its non-core assets. The point of massive risk has passed. It is a better company than it was three years ago. In terms of its restructuring, it is going back to its roots of being a retail bank.”