Abrdn share price forecast ahead of the FTSE reshuffle

Abrdn (LON: ABDN) share price collapsed to the lowest level since 2009 as the company heads out of the FTSE 100 index. The stock dropped to a low of 147p, which was about 70% below its highest point since 2015. It has fallen by more than 40% this year, making it one of the worst-performing stocks in the Footsie.

Abrdn to exit FTSE 100

Abrdn, formerly known as Standard Life Aberdeen, is a leading fund manager with over 508 billion pounds in assets under management. This makes it one of the biggest investors in the UK.

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Abrdn has come under intense pressure this year as global equities have dropped. This performance has led to substantial outflows, which have affected the company’s revenue and profits.

The company recently reported a loss before tax of 320 million pounds. Its fee-based revenue dropped by 11%. Its net inflows in the first half of the year dropped from over 5.8 billion pounds to 2.2 billion pounds. At the same time, the number of new customers dropped from 47.4k to 18.6k while the daily average retail trading volumes continued to fall. 

This performance has pushed Abrdn share price down sharply as investors worry about the company’s future. As a result, its total market cap has dropped to about 3.2 billion from about 11 billion pounds when Standard Life and Aberdeen merged.

Exiting the FTSE 100 index will have some impact on the stock since all Exchange-Traded Funds (ETF) that track the index will be forced to sell the shares. At the same time, leaving the index will lead to a loss of prestige.

Still, analysts caution against selling the stock because of this relegation since it has already been priced in by the market. An analyst at Morningstar told FT:

“Many active fund managers make a good living attempting to pre-empt index announcements, and by the time you have heard about the potential deletion or inclusion it will likely be too late to take advantage of the news,”

Abrdn share price forecast

The daily chart shows that the Abrdn stock price has been in a steep downward trend in the past few weeks. In this period, the stock has managed to move below the 25-day and 50-day moving averages while the Stochastic Oscillator has dropped below the oversold level. 

The stock also moved slightly below the important support at 148.60p, which was the lowest level on July 5. Therefore, the stock will likely continue falling as sellers target the next key support at 140p.