Investors should focus on big water players in China like Guangzhou Investments, Beijing Enterprises Water and Singapore listed SIIC Environment, says OCBC in an April 27 report.
After more than a decade of rapid industrial growth and rampant pollution, the nation now faces a severe strain on its water supply. Environmental experts also warn that the water shortage crisis is growing despite Beijing embarking on ambitious plans to alleviate the issue.
In a recent report, China’s Ministry of Water Resources found that some 80% of groundwater in the mainland’s river basins is unsafe for human contact.
However, the waste-water industry in China is currently dominated by large state-owned enterprises (SOE), which comes as no surprise, given that the sizable outlay needed for the building of a water treatment project.
The People’s Bank of China (PBOC) believes that China will need an additional RMB2-4 trillion ($414-828 billion) of funds to combat national environmental challenges. It is increasingly turning to public-private collaborations to finance these projects, with the government at most footing about 15% of the total bill.
“Besides the expected increase in number of water treatment plants, market watchers are also upbeat about seeing more opportunities that should come from the impending hike in water tariffs by end 2016,” says OCBC lead analyst Carey Wong in a report.
“But having said that, we think that investors can also consider using ETFs to ride on not only China’s but also the global water industry’s prospects, like Guggenheim S&P Global Water Index ETF (CGW) and Powershares Global Water UCTIS ETF,” Wong adds.
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After more than a decade of rapid industrial growth and rampant pollution, the nation now faces a severe strain on its water supply. Environmental experts also warn that the water shortage crisis is growing despite Beijing embarking on ambitious plans to alleviate the issue.
In a recent report, China’s Ministry of Water Resources found that some 80% of groundwater in the mainland’s river basins is unsafe for human contact.
However, the waste-water industry in China is currently dominated by large state-owned enterprises (SOE), which comes as no surprise, given that the sizable outlay needed for the building of a water treatment project.
The People’s Bank of China (PBOC) believes that China will need an additional RMB2-4 trillion ($414-828 billion) of funds to combat national environmental challenges. It is increasingly turning to public-private collaborations to finance these projects, with the government at most footing about 15% of the total bill.
“Besides the expected increase in number of water treatment plants, market watchers are also upbeat about seeing more opportunities that should come from the impending hike in water tariffs by end 2016,” says OCBC lead analyst Carey Wong in a report.
“But having said that, we think that investors can also consider using ETFs to ride on not only China’s but also the global water industry’s prospects, like Guggenheim S&P Global Water Index ETF (CGW) and Powershares Global Water UCTIS ETF,” Wong adds.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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