Shares in major Adani investor GQG plunge after analyst note on outflows (updated)

GQG Partners

02/12/2024 03:48

(Adds GQG and Adani context from fourth paragraph)
    By Scott Murdoch
       SYDNEY, Dec 2 (Reuters) - Shares of Australian-listed
GQG Partners  GQG.AX  tumbled 13% on Monday after UBS downgraded
the stock and said the firm may have lost A$600 million ($390
million) in funds under management in the two days following the
indictment of Adani Group executives.
        GQG is a major backer of Adani Group companies, whose
founder Gautam Adani and seven other company associates have
been indicted by U.S authorities on bribery charges. Adani Group
says the allegations are baseless and has vowed to seek "all
possible legal recourse". 
    UBS downgraded GQG from a buy to a neutral rating and
reduced the stock's price target from A$3.30 to A$2.30. The
shares were last trading at A$2.07.
    The bank's analysts said their estimate of A$600 million in
outflows over two days was based on a memo sent from GQG to
investors.
    They added that they were 'largely comfortable' with the
investment perfomance implications for GQG from its Adani
exposure.
    However, the analysts also noted GQG had experienced weaker
fund inflows during November before the Adani news and said the
company was likely to experience slow funds growth in the near
term.
    GQG did not immediately respond to a request for comment on
the analyst downgrade.
    U.S. authorities have accused Gautam Adani, his nephew and
executive director Sagar Adani and managing director of Adani
Green  ADNA.NS  Vneet Jaain, of being part of a $265 million
scheme to pay bribes to secure Indian power supply contracts,
and misleading U.S. investors during fundraisings.
    Gautam Adani responded to the US indictment for the first
time on the weekend in a speech where he said Adani Group had
previously faced challenges and that the conglomerate was
committed to "world class regulatory compliance".
    
    
    
    ($1 = 1.5392 Australian dollars)

 (Reporting by Scott Murdoch in Sydney; Editing by Tom Hogue and
Edwina Gibbs)
 ((Scott.Murdoch@thomsonreuters.com;))