Ask The Experts: Defensive and Sustainable Earnings from This Sector
Peter Meany, Head of Global Listed Infrastructure, First State Investments share his outlook for the global infrastructure sector, as well as picks for the First State Global Infrastructure fund.
Disclaimer: Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same.
What's your view on the infrastructure sector in 2012?
- Good opportunities for the infrastructure sector in 2012
- Infrastructure is a market with defensive earnings
- Generous yield of about 4.5%
Versus broader equity markets, how attractive is the infrastructure sector in 2012?
- Underlying fundamentals should help infrastructure companies perform robustly
- Expected total return of about 10 to 12%
Are there any risks that infrastructure investors should be aware of?
- Equity risk in general
- Defensive qualities will allow sector to hold up well
- Political intervention will be a risk particular to the infrastructure sector
- Governments in many emerging markets have restricted returns on some infrastructure assets to control inflation
Within the infrastructure space, is there a particular investment idea you're strongly bullish and bearish on?
- Some structural growth stories continue to look good
- Some companies the fund is buying include a mobile tower operator and an oil storage companies
- More bearish on very defensive companies such as regulated utilities and energy pipelines due to less upside potential
||21 March 2012
||Ask The Experts: Defensive and Sustainable Earnings from This Sector