MARKET REPORT: China property write-off hits Standard Chartered

Shares in Standard Chartered sank as the bank’s exposure to China’s property market was laid bare.

The FTSE 100 lender took a £154m charge on its assets in Chinese real estate amid concerns surrounding the sector.

The Asia-focused firm also slashed the value of its investment in China Bohai Bank, in which it has a 16 per cent stake, by £578m.

Profit tumbled 54 per cent to £523m in the three months to the end of September, far short on the £1.18billion analysts expected.

Susannah Streeter, at Hargreaves Lansdown, said: ‘Its exposure to China, where it’s expanded rapidly, is its weakest link, with the real estate sector buckling under a mountain of debt.

Hit: Profit tumbled 54 per cent to £523m in the three months to the end of September

‘There may be hopes that the big stimulus plan announced will provide the medicine needed but authorities have been at pains to point out it’s not designed to prop up the troubled property sector.’

Shares plunged 12.4 per cent, or 88.8p, to 625.2p. The stock soared 20 per cent in January after reports that the largest bank in the UAE was considering a takeover bid. But First Abu Dhabi Bank decided against making a formal offer.

Danni Hewson, head of financial analysis at AJ Bell, said: ‘It looks increasingly vulnerable to a takeover, with First Abu Dhabi freed from UK takeover restrictions preventing it from returning with a bid. If it does have another crack it may well find it can do so at a cheaper price.’

The FTSE 100 fell 0.8 per cent, or 59.77 points, to 7354.57 and the FTSE 250 was down 0.5 per cent, or 87.62 points, to 16,783.098. The European Central Bank held interest rates for the first time in more than a year as the single currency bloc’s benchmark borrowing costs remained at 4 per cent.

One company that will remain on the London market, at least for the time being, is Renewi after the waste management firm rejected a second takeover bid of 810p a share, from Australian private equity group Macquarie. Shares dived 18.1 per cent, or 119p, to 540p.

Packaging firm DS Smith rose 1.1 per cent, or 3p, to 272.1p following an increase in sales of cardboard boxes. But there was further pain for Rentokil – down 10.6 per cent, or 48.2p, to 406.4p – as the pest control firm sank into the red for the tenth consecutive session.

It came as upbeat results from US peer Rollins were a stark contrast to last week’s gloomier outlook from the London-listed firm on demand in North America.

It was a tricky session for Hunting as the oilfield services firm made no changes to its annual outlook despite winning a contract and posting higher profits. Shares reversed 8.1 per cent, or 25p, to 284p. Inchcape enjoyed a strong third quarter after the car dealership’s revenues surged 35 per cent to £2.8billion in the three months to the end of September, revving its shares up 4 per cent, or 25.5p, to 670.5p.

A boom in sales of fantasy novels helped Bloomsbury Publishing to highest first-half results as revenues rose 11 per cent to £136.7m in the six months to August 31 while profit rose 11 per cent to £17.7m. Shares fell 3.5 per cent, or 14p to 390p.

It was a turbulent day for Wizz Air after broker RBC downgraded its target price on the budget airline’s stock to 3400p from 3900p. Shares fell 3.3 per cent, or 54p, to 1570p.

Cornish Metals soared 10.5 per cent, or 1p, to 10.5p after the miner commissioned and opened the water treatment plant at a tin mine.

Revenues and profits fell at Renishaw in the three months to September 30 amid a slump in trading amid weaker demand from the semiconductor sector. It dropped 2.2 per cent, or 68p, to 2970p. Finally, Foxtons retreated 7.6 per cent, or 2.9p, to 35.1p as the estate agent said house sales fell nearly 25 per cent in the quarter to September 30.

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