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Ashmore downgraded to ‘underweight’ by JP Morgan over exposure on risky emerging markets

Analysts expect Ashmore to continue posting negative quarterly results, after the three months to March saw a US$3.6bn outflows

Ashmore Group - Ashmore downgraded to ‘underweight’ by JP Morgan over exposure on risky emerging markets

Ashmore Group PLC (LON:ASHM) was downgraded to ‘underweight’ from ‘neutral’ by JP Morgan as increasing uncertainty in the emerging markets poses risk to net fund flow recovery.

Analysts cut the target price to 310p from 350p, around 17% lower than the current share price.

READ: Ashmore's emerging market assets plunge 22% in Q1 amid coronavirus sell-off

The investment manager posted US$3.6bn net outflows in the three months to March, the first after 12 quarters of inflows.

Analysts forecast the negative trend to continue based on the FTSE 250-listed firm’s historical flow trends, its fund’s underperformance as well as a cautious outlook on emerging markets debt industry flows.

“Our emerging markets strategy team are also more cautious in the near term on the region, which we believe could have a negative impact on increasing exposure to emerging markets over the coming months,” the investment bank commented.

Shares dipped 1% to 365.4p on Tuesday mid-morning.

Quick facts: Ashmore Group

Price: 372.4 GBX

LSE:ASHM
Market: LSE
Market Cap: £2.65 billion
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