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HSBC says go with the flows

02 February 2017 15:57

In their initiation note on the UK asset manager sector, analysts at HSBC reckon the industry is well-placed for growth, despite rising regulatory costs.

Through efficiency improvements the bank forecasts 8% pa earnings growth, translating into 7% pa dividend growth over the next 3 years.

HSBC initiated coverage as follows:

- St James's Place (LON:STJ) and Jupiter (LON:JUP) as 'Buy',

- Hargreaves (LON:HL.), Schroders (LON:SDR), Ashmore (LON:ASHM) and Aberdeen (LON:ADN) as 'Hold'.

Describing the positive themes for the sector, analysts commented:

"We see GBP10bn pa of net inflows into UK institutional over 2016-19e from LDI and third-party insurer assets and GBP10bn pa of net inflows into UK retail driven by increasing demand for ISAs and general investment accounts.

"AUM growth for well-positioned asset managers should alleviate revenue margin pressures from competition and evolving product mix."

At 3:57pm:

(LON:ASHM) Ashmore Group PLC share price was +0.2p at 314.8p

(LON:HL.) Hargreaves Lansdown PLC share price was +3.5p at 1360.5p

(LON:JUP) Jupiter Fund Management plc share price was -2.15p at 413.05p

(LON:SDR) Schroders PLC share price was -12.5p at 2929.5p

(LON:STJ) St Jamess Place PLC share price was -7.5p at 1070.5p

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