UK's Ashmore hit by further fund outflows, shares slip

LONDON (Reuters) -Emerging markets-focused fund manager Ashmore reported further outflows of client cash in the last six months of 2023 on Wednesday, weighing on its shares in early trading.

Ashmore reported net outflows of $4.5 billion in its first-half results to end December, contributing to a 3% drop in its assets under management to $54 billion.

The fund manager's shares were last down 2.8% on Wednesday.

Analysts at JPMorgan said in a note that company staff costs were also higher than expected, adding that they expected improved performance across Ashmore's funds to take a few more quarters to translate into inflows.

In its previous half-year Ashmore saw net outflows of $3.9 billion.

Markets are gearing up for their biggest election year in decades, which could make for choppy markets and blur the outlook for some key economies.

Ashmore said it expected further hikes in asset prices across emerging markets this year on easing monetary policies and a weaker U.S. dollar.

The elections frenzy comes against a backdrop of sharply higher global borrowing rates, piling pressure on more fragile economies even though the prospect of interest rate cuts from the world's big central banks is firmly on the horizon.

CEO Mark Coombs said in a statement that while he recognised risks, including those related to the raft of elections and growth headwinds in China, "there is a compelling argument for a shift in asset allocations from heavily indebted and relatively expensive developed markets to the emerging markets".

Ashmore's profit before tax was up 38% year-on-year at 74.5 million pounds ($93.9 million) for the period ended Dec. 31.

($1 = 0.7933 pounds)

(Reporting by Eva Mathews in Bengaluru and Iain Withers in London; Editing by Sherry Jacob-Phillips and Jan Harvey)