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PTM Reveals Unrealized Loss On Its Seed Investments In 1HFY19 - What Investors Need To Know

  • January 09, 2019 05:50 PM AEDT
  • Team Kalkine
PTM Reveals Unrealized Loss On Its Seed Investments In 1HFY19 - What Investors Need To Know

Manager of International equities, Platinum Asset Management Limited (ASX: PTM) recently informed to its shareholders that the company will record an unrealized loss on its seed investments in the half-year ending 31 December 2018. Further, the company also reported that it is expecting to receive little in the way of absolute return related performance fees income. Following the release, the share price of the company decreased by 3.491% on January 09, 2019.

On 8 January 2019, the company reported that as at 31 December 2018 the company has Funds Under Management (FUM) of $24,089.6 million which is around $99.5 million less than the previous month where the same was $24,189.1 Mn.

In the Annual General Meeting (AGM) of the company, held on 15 November 2018, the chairman had informed that due to the combination of the trade war between the US and China, increasing US interest rates and the tightening of credit in China, the international fund of the company is underperforming.

The trade war between China and the US was started when US President Mr. Donald Trump imposed high tariff duties on the Chinese product, following which China also imposed high tariffs on the US products. As per economists, so far China has been more affected by this Trade war than the US, but the effect of this Trade war can be seen in the economies of different countries like Australia. US and China Trade war is one of the main reasons behind the underperformance of the International equities.

At the AGM, the chairman also informed that, despite facing challenging conditions in the financial market, the company continues to be well positioned and it is planning to make long term investment in people, processes, and technology.

As at 30 June 2018, the company’s FUM was around $25.7 billion which is 13.1 percent higher than the corresponding previous year. The strong investment performance of the company’s funds in FY 2018 added around $3.5 billion to FUM during the financial year 2018. However, due to weaker market returns the FUM has now decreased to $24.09 billion as at 31 December 2018. In FY 2018, the revenue of the company increased by 5.2% to $328.7 million on the back of an increase in inflows and strong investment performance. The profit after tax attributed to owners was $189.2 million in FY 2018 which is 1.7 percent higher than FY 2017. Based on the profit the basic and diluted earnings per share (EPS) for FY 2018 was 32.36 cents.

During FY 2018, the company took several initiatives which include the launch of Innovative “Quoted Managed Funds” on Australian Securities Exchange (ASX), which attracted around A$419 million in FUM by 8 November 2018.

Meanwhile, in the last six months, the share price of the company decreased by 10.31 percent as on 8 January 2019 and is trading at a PE multiple of 15.05x. PTM’s shares traded at $4.700 with a market capitalization of circa $2.86 billion as on 9 January 2019 (AEST 4:00 PM).


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