Ashmore H1 profits drop amid 'subdued' investor appetite

8th Feb 2023 08:02

(Sharecast News) - Emerging markets asset manager Ashmore posted a drop in first-half profits on Wednesday as it pointed to "subdued" risk appetite in the face of several global macro and geopolitical headwinds.

In the six months to the end of December 2022, pre-tax profit fell 54% on the same period a year earlier to £53.8m, with assets under management down 11% to $57.2bn. Ashmore noted a positive market performance of $0.8bn and net outflows of $7.6bn, "reflecting subdued investor risk appetite for much of the period".

Chief executive Mark Coombs said: "Global capital markets sentiment, and therefore asset prices, experienced significant fluctuations over the past six months, driven by inflation data, the hawkishness of developed world central banks, the ongoing war in Ukraine and other geopolitical risks, and China taking initial steps to withdraw its zero Covid policy."

He struck a more positive note on the outlook, however, noting that some of these headwinds are now receding. In particular, he highlighted the Fed's aggressive policy tightening and argued that China reopening its economy will support trade more broadly. He also said that several emerging countries are benefiting from the monetary policy decisions taken over the past two years.

"Valuations continue to be attractive across Emerging Markets and investor positioning is light given the uncertainty and macro challenges of the past couple of years," Coombs said.

"Therefore, after a positive shift in sentiment towards the end of 2022, and consequently a strong increase in new issuance in early 2023, risk appetite should continue to increase, underpinning market performance and ultimately leading to capital flows into the Emerging Markets."