UK's Ashmore half-year profit slumps on tepid risk appetite

Emerging markets-focused asset manager Ashmore Group ASHM on Wednesday reported a 54% drop in its half-yearly profit before tax as net outflows and subdued investor risk appetite hit its assets under management.

The company reported profit before tax of 53.8 million pounds ($64.76 million) in the six months to end-December during which it saw net outflows of $7.6 billion.

Russia's invasion of Ukraine, a soaring dollar and China's economic strains have combined to give emerging markets their most difficult year on record in 2022. Ashmore shares had fallen more than 17% last year.

But the London-based asset manager said the last three months of the year had seen a recovery in emerging market assets that had continued into 2023.

"The 2022 issues are not completely in the rearview mirror and people are still assessing them," Ashmore chief financial officer Tom Shippey told Reuters, pointing to the return of geopolitical tensions.

"But I do think that markets are more constructive at the beginning of 2023 than they were for the vast majority of 2022."

Ashmore shares traded flat compared to a 0.7% gain in the FTSE 250 (.FTMC). The stock is up around 15% since the start of the year.

Shippey added Ashmore was looking to grow its local market business which accounted for around 10% of assets and nearly 40% of its workforce. Ashmore is already active in countries from Colombia to Saudi Arabia and India to Indonesia.

He added there were no plans to cut any jobs.

The company confirmed assets under management stood at $57.2 billion at the end of the reporting period and said it would maintain its interim dividend at 4.8 pence per share.

($1 = 0.8308 pounds)