15th Oct 2015 11:55
LONDON (Alliance News) - Ashmore Group PLC on Thursday reported a 13% drop in assets under management during the opening quarter of its financial year, hit by net outflows of USD4.0 billion and negative investment performance of USD3.8 billion.
The shares fell as low as 271.50 pence in early trade on Thursday morning, before rising to as high as 288.80p. The stock was up 1.5% at 288.20p in afternoon trade in London. The recovery in the share price came despite Ashmore's assets under management coming in below what had been expected by the market.
The latest update on fund flows had taken on new importance due to weakening emerging markets sentiment towards the end of the first quarter, which Ashmore said had enabled it to take on risk at "attractive" prices, particularly in "high yield corporate credit, local currencies and selected external debt markets where the underlying credits are sound but spreads have widened to attractive levels".
Overall, assets under management fell to USD51.1 billion at the end of September from USD58.9 billion at the end of June.
The quarter coincided with turmoil in China's stock market on fears about its economic growth, with fears spreading across emerging markets.
"The market environment remained challenging during the quarter and influenced client behaviour in what is typically a quieter period. Concerns over global growth prospects affected sentiment and resulted in price weakness and greater volatility across global markets," Chief Executive Mark Coombs said in a statement.
"However, this backdrop has provided good opportunities to add risk where prices have diverged from fundamentals, and certain investors are now acting upon the value apparent in the Emerging Markets and are increasing allocations," Coombs said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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