A monthly review and outlook of the global listed infrastructure sector.
Market review - as at June 2017
Global listed infrastructure declined as political uncertainty and rising bond yields overshadowed a broadly positive economic backdrop.
Growth infrastructure sectors, which benefit from the higher volumes in an improving economic environment, held up relatively well. The best performing sector was Airports, which rallied on continued positive traffic momentum.
Utilities (Multi, Water and Electric) underperformed as central banks signalled that the era of expansionary monetary policy may be drawing to a close, pushing bond yields higher and dampening demand for income-generative assets.
The best performing region was Latin America, which was led higher by Mexican and Brazilian toll roads and airports. Toll road operator OHL increased after receiving a joint takeover bid from Spanish construction firm OHL Concessions and Australian fund manager IFM.
The UK underperformed owing to its large utilities weighting. Water utilities including United Utilities, Severn Trent and Pennon were affected by the view that the sector’s 2019 regulatory review may introduce stricter price controls.
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