MARKET REPORT: Stock market turmoil takes toll on Ashmore

Ashmore suffered a sharp decline in assets under management as investors fled amid the turmoil that hit global equity markets.

The FTSE250 investment manager, which focuses on emerging markets such as India, Brazil and Mexico, reported that assets under management had fallen by £7.1 billion to £50 billion in the three months to the end of September.

Ashmore also recorded £2.7 billion in investment losses as soaring inflation, the war in Ukraine and rising interest rates battered markets around the world.

The company said the asset outflows were mainly due to institutional investors reducing their exposure to debt and currencies.

Emerging markets found themselves at the sharp end of the downturn as growing fears of a global economic slowdown prompted investors to rush to havens like the US dollar.

Shares in emerging economies have fallen nearly 30 percent since early 2022, heading for their worst annual performance since the 2008 financial crisis. Meanwhile, emerging market government bonds also fell 23 percent over the course of the year.

Ashmore boss Mark Coombs said the decline during the quarter was the result of “ongoing uncertainty about geopolitical risks, higher inflation and increasingly aggressive central banks.” He added that this had “increased the risk of a recession” in multiple countries”, leaving investors with a “limited” risk appetite, causing them to pull out of the market.

Analysts at broker Peel Hunt said the numbers were “slightly worse” than expected and general investor risk aversion “will not change anytime soon.” Meanwhile, investment bank UBS lowered its share price target from 260p to 235p after analysts said it was “another difficult quarter” for the group.

Shares in Ashmore fell 2 percent, or 3.8 percent, to 186.7p.

The FTSE 100 climbed 0.12 percent or 8.52 points to 6858.79 and the FTSE 250 rose 0.61 percent or 103.56 points to 17,032.82.

The markets ended a volatile week with a high as traders take heart on signs that the government is about to roll back more parts of the mini-budget after Kwasi Kwarteng was fired as chancellor after just 38 days in the job.

But Susannah Streeter, an analyst at Hargreaves Lansdown, said Prime Minister Liz Truss, despite Kwarteng’s departure, now faced a “horror show of her own making” and that the “embarrassing reshuffle” had significantly damaged the government’s credibility.

“There will be a long way to go and significant bridges to be built before the UK risk premium disappears,” she added. The rise in the FTSE100 was supported by equities in UK-facing banks, in hopes that the government’s turnaround could provide some support to the faltering economy.

Lloyds rose 1.6 percent or 0.68p to 42.45p and Barclays gained 0.2 percent or 0.28p to 142.82p.

Shares in online supermarket Ocado also rose 4.8 percent, or 21p, to 456.8p as the stock rose after news Thursday that one of its customers, US supermarket giant Kroger, is merging with rival Albertsons.

Fears of a recession continued to weigh on oil prices, with Brent crude hovering around $92 a barrel.

Shell shares fell 1.4 percent or 32.5 pence to 2270 pence, Harbor Energy fell 5 percent or 21.1 pence to 399.1 pence and BP slipped 0.7 percent or 3.2 pence to 455.05 pence .

Mid-cap oil rig builder Petrofac rose 4.5 percent or 4.25 pence to 99.55 pence after Peel Hunt upgraded shares from “buy” from “hold,” signaling new contract gains for the company and forecasts of a rising energy demand over time. coming years.