Fresh plunges in the value of emerging market currencies have send equities sharply lower this morning, with an analyst downgrade adding to the pain for EM-focused Aberdeen.
Analysts Bruce Hamilton and Anil Sharma cut Aberdeen's rating from neutral to underweight, warning the business is less well-positioned to cope with the ongoing problems across emerging markets than peers.
"Continued challenges to EM fundamentals are driving increased uncertainty over the EM allocation story and performance," the duo said.
"Historical concentration of flows in GEM/APAC equity and EM debt means the group may be less able than peers (e.g. Schroders) to withstand the above pressure," it said.
The note comes amid a tumultous week for emerging markets themselves, with currencies including the rouble and the South African rand falling to five-year lows against the dollar.
With concerns over such developments hurting equities - the FTSE stood down 0.8% at 6,717 in morning trading - benchmark US treasury yields fell to 2.74%, their lowest level since the Federal Reserve announced it would begin tapering its QE programme.
With downside risks in the region on the increase, Morgan Stanley lowered its price target for Aberdeen to 393p. It estimates the fund house's global and emerging markets equity funds account for 60% of group revenues.
The analysts noted outflows over the last six months have been high, and expect shares to continue to struggle as a result.
"The 8% annualised outflow rate of past 6 months, compares to circa 3% sector growth. Absent flow recovery, history suggests a further de-rating is likely," they added.
Aberdeen's shares were down 5% or 21.2p, at 400.2p by 10:35am, touching their lowest level for three months.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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