Booming economies such as China and India have massive infrastructure needs to support their economic growth and meet the growing demands of their populations. These needs include roads, bridges, transport networks, water and sanitation systems, energy infrastructure, and so on. Investment in these areas is crucial to stimulate the economic and social development of these nations.
In developed countries, many infrastructures are ageing and require regular renovation and maintenance to maintain their efficiency, safety and sustainability. Transport systems, energy networks and digital infrastructures, among others, need to be constantly upgraded to meet the changing needs of modern societies.
Another catalyst for infrastructure is the transition to a greener, more sustainable economy. This requires massive investment in climate-resilient, low-carbon infrastructure.
Against this backdrop, the major European players in the construction and infrastructure sector are emerging as world leaders, exporting their know-how on major projects across the globe. While residential construction is influenced by interest rates and subject to economic cycles, non-residential construction, which includes projects such as road, airport and energy infrastructure, is less vulnerable to these fluctuations, displaying stability or even counter-cyclicality.
In the United States, the infrastructure sector is enjoying sustained growth and notable stability. This trend offers continued potential, particularly with the prospect of a recovery in the residential sector, helped by falling interest rates and the growing need for housing. What's more, the importance of renovation in real estate is outstripping that of new construction, with more and more people opting for renovation projects over new builds, highlighting another crucial aspect of the market.
Some infrastructure players are benefiting from the current super-cycle and are genuine growth stocks. The advantage of playing the infrastructure theme through structured products is that you can take advantage of the current volatility and obtain high annual coupons through a selection based on our research and its partners.
Do not hesitate to get in touch with your contact person at Renalco or contact us here. Our dedicated specialists will be happy to assess your personal needs and discuss investment solutions that would be suitable for your situation.
Source : Kepler Cheuvreux Solutions - April 2024
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