The infra300® index, widely recognised as the industry benchmark for infrastructure performance, tracks the monthly returns of 300 unlisted infrastructure companies worldwide. The index saw a 5.59% total return in Q3, with the Transport and Renewable sectors being the primary drivers. The index spans a diverse range of sectors, offering a comprehensive view of global infrastructure market trends and performance.
Among the highlights of Q3 2024:
- The infra300 index saw improved performance in Q3 compared to Q2, with a 5.59% total return driven primarily from higher valuations due to interest rates cuts and lower equity risk premium.
- The recent interest rate cuts in the US and Europe, coupled with expectations for a soft landing in the global economy, are driving an increase in infrastructure companies’ valuations more broadly, which is also reflected in the infra300 index performance.
- The cash returns of the index were 11.4% year-on-year basis, reflecting the substantial dividends paid by infrastructure companies in the past full year.
- The Transport and the Renewable sectors were the main return drivers, having returns of 1.58% and 1.04% respectively.
- Contracted revenue companies led index returns, highlighting their stable cash flows and strong investor appeal for predictable returns amid economic uncertainty.
- The top five performing companies saw an average valuation increase of 17.5% quarter-over-quarter driven by a reduction in discount rates applied in their valuations.
- Three companies remain on the watchlist due to potential financial difficulties.
Read the full analysis here.
Find out more about the infra300® index here.
