Broker snap: Strong quarter expected for Ashmore

11th Oct 2010 10:59

Singer Capital Markets expects Ashmore to announce increased assets under management (AUM) in its update for the July to September quarter. The investment management group reported AUM of $35.5bn for the year ended June, and the broker anticipates that the update will reveal an increased figure by 10% to £39bn, following a strong three months for the company.Ashmore focuses on a number of investment themes including external debt, local currency, special situations (incorporating distressed debt and private equity), real estate, corporate debt and equity.According to analysts Sarah Ing and Steve Keeling, "both dollar debt and local currency funds appear to have been performing strongly during the past three months with Ashmore's 'emerging markets liquid investment portfolio' [(debt fund)] up some 10.2% since the end of June."There has been a significant slowdown in redemptions, which peaked during 2009 at 41% of average AUM. Redemptions have subsequently fallen to more historic 'normalised' levels of around 12%.The broker expects Ashmore's earnings to see a positive momentum given the outlook for emerging markets and returns in currency/debt. Therefore, its 'buy' status has been reinforced. The broker has a target price of 360p for the stock.