New Delhi: In a dynamic financial landscape full of ups and downs, the Global Listed Infrastructure (GLI) sector, as analyzed Morgan Stanley Investment Management ,msim) The global listed infrastructure team is resilient to short-term adversities while projecting a strong long-term outlook.
According to an article by Morgan Stanley, despite facing a challenging 2023, GLI demonstrates solid fundamentals across various infrastructure sectors, despite underperforming broader global equity markets.
The apparent underperformance in 2023 has been attributed to factors beyond fundamental concerns, with favorable top and bottom line trends prevailing for most asset and industry types in infrastructure.
The four major industry categories of core listed infrastructure securities – utilities, energy infrastructure, communications and transportation – show positive top and bottom line trends.
Only the communications sector, particularly within the US wireless towers subsector, faces challenges with steady 2023 cash flow growth.
In contrast, European tower operators and global data center companies are enjoying strong fundamental trends.
Against the fundamental backdrop and current valuations relative to broader equity performance, GLI companies appear well positioned to maintain margins.
Interest and other operating costs, often considered “pass-through”, contribute to this flexibility. Current valuations, although impacted by short-term headwinds related to interest rates, remain attractive compared to broader equity markets.
Despite short-term headwinds, the defensive sectors of Utilities and Communications trade at attractive valuations, providing an alternative perspective.
Regulatory structures enable infrastructure companies to effectively navigate high interest costs, emphasizing their ability to maintain margins.
GLI’s historical performance in recessionary environments reinforces its resiliency. The sector has a track record of outperforming global equities during challenging economic periods.
If a modest economic downturn occurs, some sectors within the GLI, such as freight rail and energy infrastructure, are poised for a positive recovery.
As the global economy potentially picks up again in 2024, GLI is positioned to benefit. Areas of growth in infrastructure, such as energy transition and renewable energy, have not been fully rewarded in 2023.
A more stable economic and financing environment is expected to underline opportunities in these sectors, leading to a potential re-rating of companies associated with such themes.
Over the long term, GLI demonstrates its strength with low earnings volatility, stable cash flows, high relative income factor compared to global equities and attractive returns.
Since the inception of the Dow Jones Brookfield Global Infrastructure Index, the GLI has provided superior returns to global equities at lower volatility.
In short, msim global listed The infrastructure team emphasizes GLI’s resilience against short-term challenges and looks forward to a prosperous future.
The region’s ability to weather economic storms and its compelling long-term prospects position it as a flexible and attractive investment option in an ever-evolving global financial landscape.
According to an article by Morgan Stanley, despite facing a challenging 2023, GLI demonstrates solid fundamentals across various infrastructure sectors, despite underperforming broader global equity markets.
The apparent underperformance in 2023 has been attributed to factors beyond fundamental concerns, with favorable top and bottom line trends prevailing for most asset and industry types in infrastructure.
The four major industry categories of core listed infrastructure securities – utilities, energy infrastructure, communications and transportation – show positive top and bottom line trends.
Only the communications sector, particularly within the US wireless towers subsector, faces challenges with steady 2023 cash flow growth.
In contrast, European tower operators and global data center companies are enjoying strong fundamental trends.
Against the fundamental backdrop and current valuations relative to broader equity performance, GLI companies appear well positioned to maintain margins.
Interest and other operating costs, often considered “pass-through”, contribute to this flexibility. Current valuations, although impacted by short-term headwinds related to interest rates, remain attractive compared to broader equity markets.
Despite short-term headwinds, the defensive sectors of Utilities and Communications trade at attractive valuations, providing an alternative perspective.
Regulatory structures enable infrastructure companies to effectively navigate high interest costs, emphasizing their ability to maintain margins.
GLI’s historical performance in recessionary environments reinforces its resiliency. The sector has a track record of outperforming global equities during challenging economic periods.
If a modest economic downturn occurs, some sectors within the GLI, such as freight rail and energy infrastructure, are poised for a positive recovery.
As the global economy potentially picks up again in 2024, GLI is positioned to benefit. Areas of growth in infrastructure, such as energy transition and renewable energy, have not been fully rewarded in 2023.
A more stable economic and financing environment is expected to underline opportunities in these sectors, leading to a potential re-rating of companies associated with such themes.
Over the long term, GLI demonstrates its strength with low earnings volatility, stable cash flows, high relative income factor compared to global equities and attractive returns.
Since the inception of the Dow Jones Brookfield Global Infrastructure Index, the GLI has provided superior returns to global equities at lower volatility.
In short, msim global listed The infrastructure team emphasizes GLI’s resilience against short-term challenges and looks forward to a prosperous future.
The region’s ability to weather economic storms and its compelling long-term prospects position it as a flexible and attractive investment option in an ever-evolving global financial landscape.
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