A monthly review and outlook of the Global Listed Infrastructure sector.

Market review - as at October 2017

Global listed infrastructure gained in October against a backdrop of solid earnings numbers and upbeat economic data. The FTSE Global Core Infrastructure 50/50 index (USD, Net TR) rose +1.4% during the month, while global equities returned +1.9%.

The best performing infrastructure sectors were Towers and Toll Roads. Towers announced strong quarterly earnings, while the breakdown of merger talks between cellphone companies Sprint and T-Mobile removed a perceived headwind to US towers’ growth rates. Toll Roads continued to climb on volume growth, positive earnings and a new takeover bid for Abertis.

The worst performing sector was Satellites, as disappointing earnings announcements re-emphasised structural weakness in the sector’s pricing power. Pipelines also underperformed. Concerns about project delays and the effect that Hurricane Harvey may have had on the sector’s September quarter earnings numbers weighed on sentiment.

The best performing region was Japan, where a decisive general election win for the incumbent Liberal Democratic Party implied a continuation of its stimulative monetary and fiscal policies; and offered political clarity. The worst performing region was United Kingdom, whose utilities were buffeted by persistent political and regulatory uncertainty; and by mounting expectations that the Bank of England was preparing to raise interest rates for the first time in over a decade.


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