Aberdeen climbs as profits rise; FTSE falters

Shares in Aberdeen Asset Management (ADN.L) advanced on Monday after the fund manager posted a 14% increase in underlying pre-tax profit, while Britain’s FTSE 100 wavered amid ongoing anxiety about Europe’s debt woes.

Aberdeen gained 7p to 281p as the group said pre-tax profit climbed to £162.2 million pounds in the six months to the end of March, up from £142.8 million a year earlier and ahead of market expectations. The Aberdeen-based group’s average fee margin rose to 43.9 basis points, from 40.5 basis points a year earlier.

According to Aberdeen, the gains were driven by strong inflows into key products, amid the ‘healthier tone’ shown by global financial markets during the period.

‘Despite continuing uncertainty in global financial markets, Aberdeen remains well placed to deliver further sustainable growth and continue to improve financial strength alongside,’ said analysts at Singer Capital Markets.

Reiterating a ‘buy’ rating, they added: ‘Factoring this in, Aberdeen does not trade at a particular premium to the peer group but is delivering an above average performance.’

The stock, which was promoted to the FTSE 100 in March, has gained 29% in the year to date.

Spanish recession

Meanwhile, the UK index of blue-chip shares edged down 0.07%, or four points, to 5,773 and the All Share index weakened 0.04% to 3,003. See the FTSE’s performance and the index’s top winners and losers.

Official data showed earlier that Spain has entered its second recession since 2009, even as it contracted less than expected, heightening concerns over the financial health of the eurozone’s fourth biggest economy.

The Spanish statistics bureau said gross domestic product dropped 0.3% from the previous quarter, during which it fell by the same amount. The Bank of Spain said last week that it expected the economy to shrink 0.4% in the first quarter.

‘Looking ahead, we fear that things are likely to get worse before they get better,’ warned Martin van Vliet, economist at ING. ‘With the bleak economic outlook and the ongoing slump in real estate, the Spanish banking sector may need more capital than currently is foreseen.’

The yield, or implied interest rate, on benchmark 10-year Spanish government bonds edged up two basis points to 5.88%, and Spain’s IBEX 35 stock index was flat at 7,146, close to last week’s post-financial crisis low.

Other stock markets in Europe were mixed: Germany’s DAX index gained 0.44% to 6,831 and the FTSEurofirst 300 index of top European shares improved 0.14% to 1,053, but France's CAC 40 index lost 0.22% to 3,259.