Abrdn faces FTSE 100 demotion; value falls to £3.2bn

Edinburgh-based investment giant Abrdn may be demoted from the FTSE 100 index at the next quarterly review, according to indicative results announced by index compiler FTSE Russell.

Falling out of the FTSE 100 index can dampen demand for a company’s shares due to the huge role played in stock markets by giant funds that simply track the performance of the index.

Abrdn’s share price has fallen about 44% in the past year, dragging its stock market value down to around £3.2 billion.

The actual review of the FTSE constituents will be conducted using stock market values as at the market close on Tuesday August 30.

Other firms in danger of falling out the FTSE 100 include Hikma Pharmaceuticals and Howden Joinery Group.

On August 9, Abrdn published first-half results showing its assets under management and administration (AUMA) fell £34 billion to £508 billion in the first half of 2022 amid the global stock market rout.

Abrdn said the drop in assets reflected the lower markets and a final tranche withdrawal of assets by Lloyds Banking Group (LBG) — both of which were partly offset by inclusion of assets from recently-acquired Interactive Investor (ii).

Abrdn reported a loss before tax for the first half of £320 million “largely due to losses of £313m from the change in fair value of significant listed investments (HDFC Asset Management, HDFC Life and Phoenix) as a result of the fall in the share price of these companies in the period.”

Fee based revenue was 8% lower at £696 million and adjusted operating profit 28% lower at £115 million “driven by market movements.”

Total H1 net outflows at Abrdn were £35.9 billion “largely reflecting final LBG tranche withdrawal of £24.4bn.”

Abrdn said it retained £7.5 billion of LBG assets in institutional quantitative funds.