Broker snap: Aberdeen Asset a key pick

Date: Thursday 20 Jan 2011

Peel Hunt says fund manager Aberdeen Asset Management remains a key pick in the sector given the momentum behind its earnings.

The first quarter interim management statement revealed that assets under management grew by 2.6% to £183.3bn. The results indicate “another quarter of similar trends, inflows into equities being offset by outflows from fixed income,” said analyst Stuart Duncan.

“In combination with the trend towards inflows into pooled funds as opposed to segregated mandates, this changing mix is expected to benefit revenues by £15m annually.”

The current share price has exceeded the broker’s initial estimate of 210p, but it believes that there is some upside to that as “cash generation is improving and the Asia Pacific franchise should be regarded as an increasingly valuable asset to the group given its scale,” Duncan added.

The stock has been placed ‘under review’ until forecasts have been updated.

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