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Highlights
- GQG Partners sees a 5.1% increase in shares after reporting growth in funds under management (FUM) and gross flows for November.
- The firm’s gross flows rose to $4.2 billion, marking a significant rise from last year’s $2.6 billion.
- Despite recent Adani Group-related concerns, analysts remain optimistic, citing minimal impact on GQG’s overall business.
Australia-listed GQG Partners (ASX:GQG) saw a notable surge in its stock price on Monday, climbing by 5.1% to A$2.185 by 0046 GMT. This rise comes after the firm reported an increase in its funds under management (FUM) and gross flows for the month of November, soothing investor concerns that had emerged following its involvement with India’s Adani Group.
While the Australian benchmark index (.AXJO) was down by 0.3%, GQG’s positive update stood out in contrast. The company, which manages significant investments across global markets, saw its FUM reach A$159.5 billion as of November 30, a slight increase from A$159.4 billion at the end of October. Additionally, its gross flows for the month totaled $4.2 billion, a substantial jump from $2.6 billion during the same period in 2023.
Investor Confidence Restored
The announcement has helped restore confidence among investors, who had been rattled by concerns related to the Adani Group, a major holding for GQG Partners. The U.S.-based investment firm has been a prominent investor in the Indian conglomerate, which has faced scrutiny over allegations of corruption and manipulation of power-supply deals. These allegations were made by U.S. authorities, who accused Adani Group founder Gautam Adani and other executives of being involved in a scheme to bribe Indian officials. Adani Group has denied these charges, calling them baseless.
In the wake of the controversy, GQG’s shares dropped by over 11% last week after UBS downgraded the stock, suggesting that the firm could have lost up to A$600 million ($383.2 million) in FUM following the indictment of Adani Group executives.
Analysts See Minimal Impact
Despite the recent setbacks, analysts remain cautiously optimistic about GQG’s outlook. Ord Minnett analysts noted that the firm’s FUM update was a positive sign, adding that the impact of the Adani-related issues appeared minimal relative to the company’s broader business. GQG’s ability to maintain strong inflows and manage a stable FUM suggests that it remains resilient, even in the face of external challenges tied to its Indian investments.
Plans for Buyback Halted
In addition to its FUM and gross flow updates, GQG Partners also announced that it would be halting its plans for an on-market buyback of up to A$100 million in Australia-listed shares. The decision to suspend the buyback was attributed to uncertainties surrounding the U.S. tax treatment of proceeds, marking a prudent move in light of the current regulatory landscape.
