Standard Chartered is raising £3.26bn of fresh capital through a one-for-eight rights issue. That's designed to pre-empt the tougher capital regime under the new Basel III arrangements. The 1,280p issue price represents a 32 per cent discount to the current 1,883p share price.
The move will bolster Standard's current core tier one capital ratio to about 11 per cent. Under the proposed Basel III rules, it would deliver a ratio of about 10 per cent - more than the 7 per cent required minimum. Management says this will avoid the danger that growth in its Asian markets may be constrained as capital is consumed complying with Basel III. Acting to avoid such constraints certainly looks wise - Standard also issued a trading update reporting decent growth in both its wholesale and retail businesses.
When: 15/01/10
Price: 1,617p
Tip performance: +16 per cent
