Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

Positive outlook for listed infrastructure: FSI

FSI/covid-19/coronavirus/

26 May 2020
| By Chris Dastoor |
image
image image
expand image

There is no ‘one size fits all’ approach to dividends for listed infrastructure companies, according to First Sentier Investors (FSI), and the lockdown has shown the positive outcomes business and governments can have by working together on infrastructure.

Rebecca Myatt, portfolio manager for global listed infrastructure (GLI), said the firm believed companies that had accepted some form of Government support should not be paying out dividends, but the companies it had invested in did not opt for that support.

“The key deciding factor, in our view, is really the strength of a company’s balance sheet,” Myatt said.

“Those with weak balance sheets and limited liquidity should not increase debt to pay out a dividend, just because they committed to it before the crisis.

“But companies with strong balance sheets and no liquidity concerns should absolutely pay their dividend.”

The GLI team would now incorporate into its analysis whether infrastructure companies need a social license to operate.

“During COVID-19 we have been reminded which services are essential for society to function at its most basic level,” Myatt said.

“As we have all retreated into our own homes our basic needs have been for the water to be running, electricity and gas to be supplied, and for our WIFI to work so that we can remain connected to the outside world.”

A notable outcome of the lockdown was the strong collaboration between governments and businesses.

“If all parties have worked well together this should only strengthen the relationships a company has with its communities and with the government,” Myatt said

“We also believe that infrastructure can have a role to play in driving economic growth. For example, the European Green Deal could help in stimulating the economy through investment in renewable generation, electrification of transportation and decarbonisation of heating.

“This allows companies to accelerate their investment in renewables, which in turn leads to job creation and economic growth.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

6 days 6 hours ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 2 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 2 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND