Aberdeen Asset Management suffers as FTSE hits 1-1/2 week lows

* FTSE 100 down 1 percent

* Aberdeen leads emerging market sell-off

* Pearson (NYSE: PSO – news) hit by downgrades after profit warning

By Tricia Wright

LONDON, Jan 24 (Reuters) – Britain’s top shares sank to 1-1/2 week lows on Friday, with stocks exposed to emerging markets among the biggest fallers, knocked by a rout in Latin American currencies.

Aberdeen Asset Management (Other OTC: ABDNF – news) shed 5.5 percent, the FTSE 100’s top faller, while peer Ashmore was among the steepest FTSE midcap decliners, off 4.7 percent, suffering from their heavy exposure to emerging markets after Argentina’s central bank gave up its battle against the currency’s decline.

“Emerging markets exposed stocks are under pressure this morning as the currency situation in Argentina is going from bad to worse,” said Mark Ward, head of trading at Sanlam Securities.

“The risk of spillage into Brazil and other major trading partners is increasing, as is the capital flight risk for Argentina,” he said.

The FTSE 100 was down 69.18 points, or 1 percent, at 6,704.10 points by 1154 GMT, trading at its lowest level since Jan. 14 and on course for its biggest one-day percentage drop this year. The index shed 0.8 percent on Thursday, hit by disappointing data from the United States and China.

Brewer SABMiller and temporary power provider Aggreko (LSE: AGK.L – news) , which have exposure to Latin America, saw respective losses of 2.6 percent and 2.9 percent on Friday.

It was a quiet day for corporate earnings, but Pearson (Dusseldorf: PES.DU – news) was a big faller, off 2.6 percent, as analysts cut their target prices for the publisher following Thursday’s profit warning.

Despite this, and warnings from other firms including oil major Shell (LSE: RDSB.L – news) as the European reporting season gradually gets under way, some investors take the view that the earnings will justify high valuations after a strong 2013.

“We do think that the earnings will come through … (Valuations are) only lofty compared to the last five years which could be the worst in most people’s careers,” said Peter Sullivan, head of European equity strategy at HSBC.

“We’re expecting double-digit earnings growth this year and next. How can we see that when the UK economy is only just emerging from recession? I think the key is that momentum of economic growth is positive across the world.”

The FTSE 100 currently trades at 13 times 12-month forward earnings – the highest since late 2009 and far above the 5-year average of 10.8 times, Thomson Reuters Datastream shows.

Ftse Futures

[email protected]

You may also like...

Rules of Discussion on Aberdeen Asset Management suffers as FTSE hits 1-1/2 week lows

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is stricly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Memebrs are requeuested to flag any violations to keep Forum Clean