Both the Government and Labor have made impressive commitments to infrastructure, but it focusses heavily on roads and rail. Australia’s economic potential depends on more essential services.
Tag Archives | infrastructure
Large companies supported and promoted by investment managers, brokers, analysts and investment banks have disappeared quickly sometimes. Retail investors should manage equity risk by diversification.
Infrastructure assets usually benefit from long-term, stable and predictable cash flows, giving them defensive characteristics, with airports traditionally offering reliability even in difficult economic conditions.
Tariffs are often seen as a negative for global trade. However, for road, rail, and port operators, tariffs may only re-calibrate origins and destinations. Political risk and the typically short life of a tariff also need to be considered.
The 2018 Budget features cuts to personal income taxes and changes to retirement income policies. There’s plenty of money on infrastructure to boost jobs and ease congestion.
Listed infrastructure is a large universe of more than 350 companies worth more than US$4 trillion at prevailing market prices. This way of entering the asset class offers several advantages over the unlisted alternative.
I like to learn from history, but also look into the future. The articles chosen provide some of the essentials of good investing, but they also peer over the horizon on what the future might bring.
The $2.3 billion allocated by the NSW Government to rebuild two stadiums will haunt them until the next election. Focussing on Allianz Stadium, what’s the business case and will crowds increase materially when it’s rebuilt?
There’s a common misconception that as a ‘bond proxy’, infrastructure asset prices will fall as bond prices do when rates rise. But these hard assets have sufficient inflation protection to drive a more robust outcome.
Chronic under-spending, public expectations for improvement and strained government budgets are placing an onus on public equity markets to help the world meets its rapidly growing infrastructure needs.
Infrastructure assets are viewed as ‘bond proxies’ because they are supposed to have predictable cash flows, but investors should delve deeper into the regulatory risks, especially in a post-Brexit, post-Trump world.
Australia needs capital for infrastructure, and SMSF trustees want direct access to assets with yield and long-term security. It’s a win-win if governments can find a structure to bring the two together.
Infrastructure assets range widely from toll roads, ports, airports, power distribution, communications, etc, but there are common risk factors to consider in all of them.
Infrastructure is sometimes seen as an alternative to low risk defensive assets like cash and bonds. But what are the implications for infrastructure investors of the low level of base or risk free interest rates?