GQG shares tank on UBS downgrade
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The news: Shares in GQG Partners dived on the ASX after UBS downgraded its rating on the fund manager due to a slowdown in flow momentum.
The numbers: GQG shares were down 13% to $2.05 by 12:25pm AEDT, having shed nearly 25% over the last month.
UBS lowered its rating on GQG from 'buy' to 'neutral' and slashed its price target from $3.30 to $2.30.
The context: UBS analysts said they see a "period of cyclical weakness in flows on the horizon" for GQG. They noted that emerging data points to a slowdown in flow momentum that began in late October, "well prior" to the heavy sell-off in GQG shares driven by its exposure to the troubled Adani Group.
The analysts said the timing of negative Adani Group publicity now leans into a slowdown in key sub-advisory flow momentum and shorter-term one-year performance track records facing negative prints.
Last month, GQG said it was reviewing its investments in Adani Group after US prosecutors charged the company's chair Gautam Adani over an alleged USD250 million ($384.5 million) bribe.
The source: UBS research
