Fund manager Aberdeen Asset Management is leading the fallers amid concerns about the effects of the market slump - particularly in Japan.
Earlier in the week Aberdeen came under pressure following a poor weekly performance from fund group Man. Now analysts at Bank of America Merrill Lynch have moved their recommendation on Aberdeen from neutral to underperform, and cut their price target from 475p to 410p. So Aberdeen is currently 12.5p lower at 410.3p. Merrill's Jonathan Richards said he believed Aberdeen's growth would slow in the near term:
Organic inflows could slow significantly from consensus expectations. With the stock up around 20% so far this year, the valuation premium to peers looks unwarranted.
Extreme moves in Japan and China [are] creating headwinds. With the introduction of a more activist Japanese central bank and weaker-than-expected Chinese economic figures, volatility in the Asian sphere has increased. Aberdeen's performance has been strong historically, but deteriorated recently, with an increase in third quartile-ranked funds.
Indeed the Nikkei 225 slipped into bear market territory overnight although it had come off the worst levels by the close, helped by reports that Japan's government pension funds will increase their exposure to equities. Even so it closed 0.21% lower at 12,877 having fallen as low as 12,548, 21% down on its intraday peak of 15,942 on 23 May. Investors are concerned the new policies of prime minister Shinzo Abe, including an aggressive campaign to lift consumer prices and encourage borrowing and spending, may not boost the economy enough. Abe's latest growth plans earlier this week were also deemed to be rather underwhelming.
However the Japanese market is still well ahead of the 10,395 level seen at the start of the year.
