Ashmore: Emerging markets giant stock jumps after beating expectations
Emerging markets specialist Ashmore has once again beaten expectations despite recording yet more outflows, leading its stock price to rise 1.6 per cent.
The FTSE 250 money manager’s half-year results revealed adjusted operating profit totalled £33.7m over the last six months of 2024, compared to the £31m forecast by analysts.
Assets under management stood at $48.8bn (£39.2bn) at the end of December, unchanged over the last half of the year. Positive investment performance added $0.6bn, while outflows detracted $1.1bn.
Net management fee income fell from $103.7m in the last six months of 2023 to just $88.3m, causing a margin drop from 39 basis points to 36, and below the 37 expected by analysts.
Total adjusted net revenue fell to £79.9m, 14 per cent lower than last year, though the firm managed to somewhat offset this by slashing adjusted operating costs by nine per cent.
Commenting on the group’s results, Mark Coombs, chief executive officer said: “Ashmore’s net flows continue to improve and AuM was largely unchanged at the end of the period. Ongoing strong control of operating costs helped to mitigate the impact of lower average AuM on the financial results, and the group continues to invest in strategic growth and diversification opportunities, including through its seed capital investments.
“There are strong arguments for investors to rebalance allocations from heavily overweight US positions in favour of the attractive valuations and investment opportunities in emerging markets.
These markets offer significant diversification and growth, which is increasingly recognised by clients and reflected in activity levels. Ashmore’s active investment management processes are delivering for clients and the Group is well-positioned to navigate the asset price volatility resulting from the US election, and to capture the longer-term upside from current market levels.”
Analysts weigh in on Ashmore’s results
Commenting on the asset manager’s results, Peel Hunt analyst Stuart Duncan said: “We believe there is still scope for optimism that a recovery in sentiment towards emerging markets could benefit Ashmore.”
“This is supported by a multi-year bull run in the US dollar, which, if it reverses, should lead to increasing allocations to areas like emerging markets, and improved investment performance, as is typical of Ashmore’s investment process.”
Last month, the asset manager shocked markets when it revealed a sharp reduction in outflows. Investors pulled $400m (£322m) in the last quarter of 2024, below the $1.1bn (£885m) expected by analysts.
The news sent Ashmore’s stock price surging more than five per cent after suffering years of a declining stock price as investors soured on emerging markets.
The asset manager’s stock is still down by 63 per cent in the last four years.