Natwest Securities Corp., negative on banks overall, made an exception on Monday for Chase Manhattan Corp.

Citing its relatively low valuation, Natwest added Chase shares to its "best idea" list, stocks that the firm believes give investors the best chance of capitalizing on current market trends.

The addition of Chase raises the number of stocks on the list to 19. Citicorp is the only other banking company on the list.

A |Buy' Recommendation

But Chase is the only bank issue that also enjoys a buy" recommendation from NatWest. Citicorp is currently rated a lower "accumulate."

Chase's shares rose 75 cents to $30.25.

Peter J. Canelo, Natwest's market strategist, said he is emphasizing cyclical stocks, particularly those selling at good value levels. He said he views banks as cyclicals, rather than - interest-sensitive

Chase has retreated 24% since mid-April because of equity-raising moves as well as the general slide of bank stocks. it is among the few bank stocks still selling below its book value - which was $32.61 per share on March 31.

Chase got its "buy" rating last week from Stephen Berman and Yun Jae Chung, Natwest bank stock analysts, who cited a likelihood of "substantial earnings improvement" in addition to its enticing valuation level right now.

Mr. Berman said Monday he anticipates "positive earnings surprises" from Chase if the bank's management can meet its announced goals over the next two years.

For the stock, that could mean "an intermediate upside in 12 to 18 months at $40 to $45, or a 35% to 50% gain, and well worth the risk," he said.

"Future setbacks, in our view, will be modest and short-lived," he said. "We see the asset disposition program and the workout effort on other real estate loans as sharply curtailing risk while bolstering earnings and consistency well beyond 1994."

In contrast, Mr. Berman expects downward earnings revisions for other banks later this year. He believes their stock prices have peaked and that gains in value in the near future will quickly be followed by selling pressure.

Mr. Berman anticipates good second-quarter earnings and some support for bank stocks. But he also suspects that investors who are heavily overweighted in banks because of their strong performance over the past two years will utilize any opportunity to trim holdings.

For that reason, he thinks a "sustained period of underperformance is a legitimate risk" for the stocks even after their recent pullback, especially if profit expectations begin to flatten.

|Earnings Momentum'

Chase, however, has been in an earnings-turnaround mode longer than many others and "will begin to demonstrate this earnings momentum later this year," said Mr. Berman.

The Natwest analyst expects Chase to earn $4.50 per share next year. That is well above the Wall Street consensus estimate of $4.05, according to First Call Corp.

He projects that credit costs will fall sharply to $870 million next year from an estimated $1.2 billion this year and an actual $1.35 billion last year.

Mr. Berman said his projected $320 million reduction in credit costs in 1994 could add $190 million to earnings after taxes, or about $1 per share.

Praise for Managers

Meanwhile, he said, Chase's management has improved its bottom-line focus and has demonstrated an ability to control overhead and concentrate the bank's operations on the right objectives.

The bank's retail banking focus on affluent individuals appears to be "a key strength and a viable long-term franchise," he said.

Meanwhile, selective strategies based on Chase's traditional strength in wholesale banking appear ready to pay off as well.

Major banks stocks gained on Monday.

In late trading, MBNA Corp., the big credit card issuer, rose $1.25 to $27.50, and SunTrust Banks Inc. was up $1.125 to $45.75.

Wells Fargo & Co. gained $2.25 to $103 and Comerica Inc. rose 25 cents to $28.50 after both banks were upgraded to "buy" from "hold" by First Boston Corp. analyst Merrill Ross.

Meanwhile, PNC Bank Corp. was up 87.5 cents to $30.875; First Bank System was up 87.5 cents to $28.875; Mellon Bank Corp. was up $1.125 to $54.875; and First Interstate Bancorp was up 75 cents to $59.

Also, Shawmut National Corp. was up 62.5 cents to $22.875. and Northern Trust Corp. was up 50 cents to $40.75.

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