Standard Chartered shares were weaker on Friday after First Abu Dhabi Bank squashed the prospect of a takeover.
A statement released by First Abu Dhabi Bank read: “First Abu Dhabi Bank PJSC notes the recent press speculation in relation to Standard Chartered and re-iterates that it is not evaluating a possible offer for Standard Chartered.”
Standard Chartered shares were down by 4.5% to 732p at the time of writing.
“Given that Standard Chartered has such a large footprint in emerging markets with its operations in 59 countries, and is highly active across the Middle East, it’s clear why speculation about a First Abu Dhabi Bank takeover reached fever pitch given the opportunities presented,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
Streeter continued to explain the issues with Standard Chartered – and why First Abu Dhabi Bank may be holding off.
“However, there are still risks ahead, given that the group has large exposure to commercial real estate debt in China, with related impairment charges chipping away at profit’s full potential. Although this may be part of the reason why FAD is for now steering clear, it’s also likely to be down to takeover rules. After FAB first announced in January it was stepping away from any offer, a six-month cooling off period kicked in, which means it is not meant to do any more deal work”