China still attractive for infrastructure investors
Despite a difficult quarter for emerging markets (EM) equities, China continued to offer strong infrastructure investment opportunities across certain sectors, such as gas and water, according to RARE Infrastructure.
According to RARE EM strategy’s portfolio manager, George Kurian, two significant Chinese gas holdings in the RARE EM Strategy rallied mainly on the back of President Xi’s speech at the National Environment Conference in mid-May.
Also, the share prices of two companies in its portfolio were further supported by strong gas demand and encouraging guidance.
At the same time, EM listed infrastructure underperformed, with Latin America experiencing headwinds during the quarter due to uncertainty of the outcome of the Mexican presidential elections.
“At RARE, we track the five-year forward-looking returns of the RARE Emerging Markets Strategy against our cost of equity. While further performance cannot be guaranteed, as at 30 June 2018, the strategy’s expected five-year annualised return was 19.1 per cent, demonstrating the depth and breadth of opportunities for the strategy,” Kurian said.
He also said that new higher expected return stocks were added recently to the strategy during this quarter.
These stocks included: Electricity Generating Public Company, a Thai electric company; Energy Development Corporation, a Philippines-based electric company; International Container Terminal Services (ICTS), a Philippines-based port operator; and Metro Pacific Investments Corporation, a Philippines toll road operator.
AUTHOR
Oksana Patron
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