In a note to clients, the bank’s analysts cut their price target for Ashmore to 270p from 325p, noting that despite a 19% drop by the stock in the final quarter of 2016, it still remains the most expensive in the sector.
They pointed out that Ashmore shares were still up 11% over the year and outperformed their asset manager peers in 2016.
The analysts said: "We remain cautious on emerging markets-exposed names, given rising US yields and deteriorating EM sentiment after the US elections.”
They added that a continued decline in volatility in US interest rates appears a necessary condition for emerging markets flows to stabilise further, which seems unlikely in the near term given economic policy uncertainty.
The analysts also cut their assets under management estimates for Ashmore for both full-year June 2017 and June 2018 to indicate declines of 8-9%.
In mid morning trading, Ashmore shares on the FTSE 250 index were down over 6%, or 18.7p to 280.6p.