(Adds detail, share price)
LONDON, Jan 17 (Reuters) - Investment group Ashmore
said on Monday that weakness in emerging markets over the last
three months of 2021 led to a further decline in assets.
Ashmore said assets under management fell $4 billion over
the quarter to $87.3 billion, following a $2.2 billion net
outflow and a $1.8 billion fall due to poor investment
performance. The group's assets also fell $3.1 billion in the
previous quarter.
Its shares dropped nearly 3% in early trade to as low as
281.2 pence, their lowest level since Dec. 10.
"Persistent global inflation expectations, new COVID-19
variants and weaker growth in China meant challenging market
conditions for emerging markets continued through the final
months of 2021," said Mark Coombs, chief executive of Ashmore.
"However, the global macro economic environment is expected
to be more supportive for emerging markets in 2022."
External debt, equities and alternative themes saw net
inflows, Ashmore said in its statement, though blended debt,
local currency and corporate debt suffered outflows.
Emerging market stocks and key fixed income
benchmarks across developing economies delivered negative
returns in 2021 as a strong dollar, high inflation, rising
global yields and slowing growth took their toll.
JPMorgan analysts said Ashmore's investment performance
remained mixed, staying below benchmarks over a three-year
horizon except for equities.
"Management believes the global macro-economic (backdrop) is
expected to be more supportive for Emerging Markets in 2022, and
can allow EM to attract capital as investors address their
underweight allocations," JPMorgan's Gurjit S Kambo wrote in a
note to clients.
"We believe that whilst valuations in EM are not demanding,
near term sentiment may remain cautious on the asset class."
Ashmore shares fell by a third in 2021 and are down nearly
3% since the start of the year.
(Reporting by Iain Withers and Karin Strohecker;
Editing by Rachel Armstrong and Emelia Sithole-Matarise)