Dollar’s retreat sinks Ashmore as investors flee

Michael Bow
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A WEAK dollar helped propel a big slide in profits at fund manager Ashmore last year, as continued uncertainty over emerging markets helped drive outflows at the group.

The emerging market specialist blamed the dollar’s retreat against sterling during the last six months of 2013 for a £30m decline in pre-tax profits. Sterling rose nine per cent against the dollar between the end of June and December 2013, rallying from $1.52 to $1.66.

Most of Ashmore’s work is conducted in dollars but it reports figures in sterling, leading to a 22 per cent decline in reported sterling profits, to £79.5m.

“Those assets are still there,” finance director Tom Shippey told City A.M. “The headline levels are easily explainable and the lower profits are just a mark to market effect.”

Shippey and Ashmore boss Mark Coombs will now spend the next few weeks meeting shareholders, some of whom helped drive Ashmore’s share price to a two year low yesterday.

Ashmore’s main customers are investors looking for exposure to emerging marketss. They pulled $10.2bn between June and December 2013, leaving Ashmore nursing net outflows of $2.9bn. Two big clients pulled money from Ashmore’s blended debt and overlay products, it said.

“One client thought they had too much exposure to Ashmore,” Shippey added. “So they decided to diversify away from us.”