Barclays blights Aberdeen hope
Aberdeen Asset Management had a difficult time in 2015 as it haemorrhaged billions of pounds worth of funds because of the turmoil in emerging markets.
Unfortunately, Barclays reckons this year could be just as bad. Shares of Martin Gilbert’s fund manager were sold down to 264.5p before they closed 6.8p cheaper at 275.2p after the broker downgraded to underweight from equal weight and slashed its target price to 250p from 350p.
Aberdeen’s stock strongly underperformed in 2015, falling 33pc against the average asset manager. It reported £34bn net outflows in 2015, of which equities outflows was £16.4bn, Global £6bn, £5.7bn from Asia-Pacific and £4.1bn from Global Emerging Markets. Yet despite those heavy outflows it still manages £27bn assets under management in Asia-Pacific Equities, £26bn in Global Emerging Markets and £21bn in Global Equities.
Barclays says the outlook looks pessimistic, with management describing Asian and Emerging markets as undergoing a cyclical correction and anticipating that the current weakness may have ‘somewhere to run’.
Barclays has therefore cut its 2016 earnings per share forecast by 8pc to 22.5p and 2017’s by 6pc to 24.2p and is forecasting a 25pc decline in earnings per share year-on-year in 2016, then a 7pc recovery in 2017.
Martin Gilbert in November rubbished talk that Aberdeen was up for sale. If the shares continue to move in a southerly direction, cash-rich private equity players such as KKR and Blackstone will surely have to take an increased interest.
The Footsie regained some composure after its worst first day of New Year trading since 2008 following Monday’s China-inspired selloff and fall of 148 points. News that the Peoples Bank of China had injected another $20bn to help prop up China’s financial markets helped sentiment and the index rallied 43.81 points to 6137.24, while the FTSe 250 regained 82.88 points to 17,205.03. Wall Street lost early gains to close just 9.72 points higher.
Argos owner Home retail had shone like a beacon before l unch i n an otherwise depressed retail sector with a gain of 13pc. It was not long before dealers found out why. The shares rocketed on the revelation that it’s board had rejected a £1bn bid approach from supermarket Sainsbury’s (13.2p down at 242.1p) and closed 40.6p or 41pc higher at 139.3p.
Two of Home Retail’s biggest shareholders Schroders and Toscafund were more than a little miffed not to be informed about Sainsbury’s approach believing synergies of the two were to merge would be significant. next’s acutely disappointing Christmas trading update, particularly the performance of its Directory online business, left the stock a painful 330p down at 6860p. It had dealers fearing the worst for Marks & Spencer, 0.30p cheaper at 435p, which reports its thirdquarter figures tomorrow. Superdry fashion company SuperGroup slumped 103p to 1542p in sympathy.
Internet retailer AO World declined 7.5p to 147.4p despite a bullish note from Jefferies ahead of the third-quarter update on January 12. The broker says AO is expanding its geographic footprint, starting with its foray into Germany, with Holland next on its list.
Travel giant TUI AG climbed 27p to 1234p on a Deutsche Bank recommendation and target price of 1345p.
Wickes owner Travis Perkins jumped 56p to 1992p on vague takeover gossip and a Credit Suisse upgrade to outperform from neutral. It lifted its target price to 2255p from 1838p.
A Cantor Fitzgerald upgrade to buy from hold helped royal Mail touch 450p and close 0.20p dearer at 437.2p. The broker says it faces challenges over the next few years but now looks better prepared to meet these. The benefits of its established brands and networks are under appreciated. bango, the mobile payments firm, rose 5p to 109p after gaining an expanded contract with Microsoft to integrate its technology across all the technology giants Windows 10 devices. The 110mplus users of Windows 10, be they using a desktop computer, tablet or smartphone will now be able to buy applications, music, films or games from the Windows Store and, via Bango’s direct carrier billing software, charge the cost directly onto their phone bill.
Renewed demand on the back of a Daily Mail New Year investment recommendation lifted Totally 17p more to 73.5p for a two-day leap of 31.5p.
Cancer immunotherapy company Scancell firmed 50.62p to 20.5p. It has had a paper publication online in Cancer Research describing the rationale behind the firm’s Moditope platform and the experimental results that support its business. The Moditope platform is based on exploiting the normal immune response to stressed cells, which is largely mediated by CD4+ T cells, and harnessing this mechanism to eradicate cancer cells.
PRIVATE healthcare network operator in the United Arab Emirate NMC Health rose 15p to 863p on a Charles Stanley recommendation. The firm withdrew an offer for Al Noor Hospitals in November on valuation concerns but is still on the acquisition trail. The broker says growth is supported by a positive outlook for healthcare in the UAE where the healthcare system is under-developed.