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(Reuters) -Emerging markets-focused fund manager Ashmore reported a higher first-half profit on Wednesday and also forecast further hikes in asset prices this year on easing monetary policies and a weaker U.S. dollar.
Emerging markets are gearing up for their biggest election year in decades, with investors focused on fiscal discipline and populist shifts that could stir markets and blur the outlook for some key economies.
The elections frenzy comes against a backdrop of sharply higher global borrowing rates – piling pressure on more fragile economies even though the prospect of interest rate cuts from the world’s big central banks is firmly on the horizon.
“Although there are risks, particularly geopolitical ones in a year of many elections around the world and continued growth headwinds in China, there is a compelling argument for a shift in asset allocations from heavily indebted and relatively expensive Developed Markets to the Emerging Markets,” Chief Executive Officer Mark Coombs said in a statement.
With many central banks easing policy as inflation declines, most of these countries have less fiscal stimulus to unwind and this economic stability provides a solid backdrop for continued asset class performance, Ashmore said.
Profit before tax was up 38% year-on-year at 74.5 million pounds ($93.91 million) for the period ended Dec. 31.
Adjusted net revenue slipped 13% to 93.4 million pounds on reduced foreign exchange gains and a drop in assets under management (AuM).
The investment group’s AuM, as at Dec. 31, was $54 billion, 3% lower from a year-ago period on higher outflows.
($1 = 0.7933 pounds)
