Aberdeen share price rises after FTSE 100 relegation

Aberdeen Gilbert Martin Gilbert 700x450Aberdeen Asset Management’s share price has risen 10.4 per cent from market opening today, after it was revealed the firm had been kicked out of the FTSE 100.

The emerging market-focused asset manager was relegated to the FTSE 250 in the latest review of the index following continued share price erosion this year.

Today the share price hit a high of 273.2p, which was up more than 10 per cent from 261.7p at yesterday’s markets close. However, the gains have dropped back down to around a 4 per cent rise.

Year to date the stock is down 9.9 per cent.

Hargreaves Lansdown senior analyst Laith Khalaf tells Fund Strategy that the downgrade to the FTSE 250 index means the firm might lose its visibility.

He says: “Aberdeen will have less visibility now as it will not be in the FSTE 100 any longer. Everyone looks at the FTSE 100 today.

“Also, a possible effect of the move could be that some tracker funds who hold Aberdeen will sell out of the company.”

This year £3.7bn has been stripped from Aberdeen’s share value for a multitude of reasons including overexposure to emerging markets, fears over a hard landing in China, declining oil price and concerns over US monetary policy.

Aberdeen’s reliance on emerging markets saw it report £9.1bn in net outflows in January over the final quarter of 2015.