Deutsche Bank has downgraded abrdn to a to-sell stock, after the British asset manager’s revealed dampened earnings last month.
The bank is taking on a “more cautious stance on several fronts”, it said in a note today.
Abrdn, which has around £508bn under management, lost its hold rating just days after dropping out of the FTSE 100 index, having lost more than 45 per cent of its share price value over the past year.
“We have been cautious on abrdn’s earnings for a while… We’ve reflected on the numbers and see further downside risk to the shares from both an earnings and capital perspective,” the bank wrote.
“We also value the excess capital locked within the Indian stakes at a five per cent larger discount to reflect concerns around the uses of sale proceeds.”
Abrdn yesterday shed a chunk of its stake in Indian insurer HDFC as it sought to bolster its balance sheet after swallowing a £320m pre-tax loss in the first half of the year.
In a statement on the London Stock Exchange on Tuesday, the firm said it had sold two per cent of its stake in the firm on the National Stock Exchange of India and the Bombay Stock Exchange for around £262m, with the cash set to be channelled into internal investment.
The firm’s stake now sits at around 1.66 per cent, based on the paid-up, issued equity share capital.
Deutsche has also dialled back its share price expectations of the asset manager by 22 per cent, from 175p to 135p.
Abrdn’s share price sank around four per cent by mid-afternoon on Wednesday to £143.25.