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Established in 1974
Over 185,000 clients worldwide
15,000 markets worldwide

Aberdeen Asset Management on the rise

The company will report its first-quarter figures on Tuesday 5 May, and market stability should see an inward flow of funds.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
London stock exchange
Source: Bloomberg

The asset manager had an eventful 2014, as traders were spooked by the weakness in emerging market economies, but the outflow of funds was offset by the acquisition of new clients from the Scottish Widows Investment Partnership takeover.

There was an exodus from emerging market investments last year as the US wound down the quantitative easing scheme. That rattled the higher risk funds that were exposed to those economies. Ashore – who are more emerging markets focused – encountered a much better withdrawal of funds, which was reflected in its share price too.

While Aberdeen Asset Management has exposure to such high-risk countries, it’s relatively small compared with the remainder of the group. The latest Federal Reserve update was very vague as to when rates will rise, and some traders are looking to September for a hike. This stability in the financial markets will assist Aberdeen Asset Management in the near-term.

Assets under management increased by 62% to £324 billion, but that was largely attributed to the takeover of Scottish Widows for £660 million. The deal made Aberdeen Asset Management the biggest listed fund manager in Europe by assets under management. Even though the company was rattled by the outflow of funds from the emerging markets division, full-year revenue and profit increased by 4% and 2% respectively.

When Aberdeen Asset Management reveals its first-half figures, the consensus is for revenue of £619 million and adjusted net-income of £229 million. This compares with the second-half figures – when revenue was £614 million and adjusted net income was £221 million. The asset manager will post its full-year numbers, and traders are anticipating revenue of £1.25 billion and adjusted net income of £447 million, and these forecasts represent a 14.6% rise in revenue and a 15% increase in adjusted net income.

Equity analysts are bullish on Aberdeen Asset Management, and out of the 23 recommendations, nine are buys, ten are holds, and four are sells. The average target price is £4.84 which is marginally above the current price. Investment banks are more bullish on Schroders, and out of the 23 ratings, 13 are buys, and ten are holds. The average target price is £33.70, which is 4.4% above the current price.

The share price has recovered from the sell-off in December when the full-year figures were revealed. The stock is receiving support from the 460p area, and if that is held it will bring the resistance at 480p in to play, and beyond that traders will look to £5. A drop below 460p, and the stock will find itself in the 440p region – which coincides with the 200-day moving average, and if that mark is punctured, the stock will find support at 420 and 400p respectively.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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