Sunday, April 19, 2009

Credit drought taxes water firms

Water as an investment theme -- I feel thirsty already. From the Calgary Herald (Canada): Water scarcity means big growth for companies that purify, transport and distribute the world's most essential resource, but a global recession that has halted new projects and put off price increases means water investors will have to wait for the boom years.

Water, cheap and indispensable, has long been prized as a stable investment in both good and bad times. But as the population grows, urbanization tightens access to clean water and climate change promises more droughts, calls to upgrade the United States' crumbling infrastructure have mounted, and companies that make pipes, filters and other products that help manage water supplies have taken on a new shine as growth vehicles.

"There are tremendous needs in this country to replace aging infrastructure, especially water infrastructure, and now there is tremendous money able to be put toward those types of projects," BB&TCapital Markets analyst Kevin Maczka said, though he cautioned that investors should not expect a "windfall" for water stocks any time soon.

…The water-focused exchange-traded fund, Power-Shares Water Resources Portfolio, has dropped about 19 per cent in the past six months, compared with a decline of 24 per cent in the Standard & Poor's industrials index. "Water is one of, if not the absolute last thing you take away, so the income is quite stable," said Kimberly Tara, chief executive of Boston-based Four Winds Capital Management, which invests in water through its Aqua Resources Fund Ltd…..

The Ladybower Dam, at the south end of the Ladybower Reservoir in Derbyshire, England, shot by Dave Pape, who has released the image into the public domain. Many thanks, Dave.

No comments: