Could a ridesharing revolution boost investment prospects?

While the comprehensive introduction of rideshare systems could take years to develop, we anticipate significant progress will be made by 2020 to 2021, at which stage we believe people will be far more aware of the importance of this sector. Looking ahead, people in cities are less likely to buy a car if there is a good transport service, and we are not alone in believing the world is moving toward the wider use of robo-taxis and automated vehicles.

Cities with poor public transportation might see ridesharing as a great supplement to public transport. Ridesharing makes a lot sense in cities with poor public transport, and shared mobility also holds broad appeal in global markets such as China. Many people living in cities are also realising that owning a car is a wasted resource, as it spends most of its time parked and the rest of its time contributing to traffic congestion.

In many ways ridesharing is little different to sitting next to strangers on a subway train or bus and in-car security cameras could bring an added level of reassurance to passengers. Younger generations are already embracing the ridesharing trend and, over time, I expect many more people will become comfortable with it as well.

Barry Mills – senior research analyst. The Boston Company, part of BNY Mellon Asset Management North America.

While the comprehensive introduction of rideshare systems could take years to develop, we anticipate significant progress will be made by 2020 to 2021, at which stage we believe people will be far more aware of the importance of this sector. Looking ahead, people in cities are less likely to buy a car if there is a good transport service, and … read more

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Out with the old: shocking stats on the need for a US infrastructure boost

The devastating impact of the 2017 US hurricane season raised timely questions about US national infrastructure in the face of an increasingly uncertain climate. Hurricane damage in southern states, such as Florida and Texas, shone a spotlight on the resilience of key utilities, such as power grids, and highlighted the need to improve safety after decades of under investment in transportation, public buildings, water treatment systems and other forms of vital infrastructure.

Infrastructure renewal was a cornerstone of President Donald Trump’s election campaign but also has almost universal support politically, and we believe much can be achieved. We are particularly positive about the potential to develop new energy infrastructure thanks to the growth in shale energy extraction. The sector faced significant financial pressures from 2014 to 2015 but we think oil and gas pipeline companies can now regroup and drive ahead with major new projects.

Brock Campbell – portfolio manager. The Boston Company Asset Management, a BNY Mellon company

The devastating impact of the 2017 US hurricane season raised timely questions about US national infrastructure in the face of an increasingly uncertain climate. Hurricane damage in southern states, such as Florida and Texas, shone a spotlight on the resilience of key utilities, such as power grids, and highlighted the need to improve safety after decades of under investment in … read more

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Steel in the ground: making the case for US infrastructure renewal

US infrastructure is overdue for upgrade. Chronic underspending on roads, bridges, water, energy and senior housing has resulted in an infrastructure unable to withstand the strain of a growing, mobile and ageing population. For the first time in decades, cyclical, secular and structural trends are aligning, which we believe will usher in a period of investment not seen since the Eisenhower administration. We forecast over US$1 trillion in projects that could be built over the next 10 years. In our view, President Trump’s forthcoming infrastructure plan and emphasis on deregulation, combined with the readily apparent economic need, provide the near-term catalysts necessary to open the floodgates.

Brock A. Campbell, James A. Lydotes, William J. Adams – The Boston Company Asset Management, a BNY Mellon company

US infrastructure is overdue for upgrade. Chronic underspending on roads, bridges, water, energy and senior housing has resulted in an infrastructure unable to withstand the strain of a growing, mobile and ageing population. For the first time in decades, cyclical, secular and structural trends are aligning, which we believe will usher in a period of investment not seen since the … read more

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Is this a sure sign of a Chinese slowdown?

Infrastructure investment has been a great source of interest for investors in the wake of Donald Trump’s election as US president, with his campaign pledge to spend US$1 trillion on US infrastructure projects clearly playing on their minds. Away from President Trump’s Twitter feed and speeches, China is a more pressing concern.

While the country is trying to rebalance to become a more consumption-driven economy, overcapacity in the construction industry remains a big issue. The country is considerably overbuilt in relation to GDP. Worryingly, if a slowdown in GDP growth occurs, we expect the Chinese government to try to plug the gap with further building. As such, with overcapacity remaining a problem and rebalancing of the economy continuing, we believe it is best to avoid businesses related to Chinese construction, including materials and building companies.

Nick Moss – Newton, a BNY Mellon company

Infrastructure investment has been a great source of interest for investors in the wake of Donald Trump’s election as US president, with his campaign pledge to spend US$1 trillion on US infrastructure projects clearly playing on their minds. Away from President Trump’s Twitter feed and speeches, China is a more pressing concern. While the country is trying to rebalance to … read more

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Infrastructure investment set to rise

Spending on infrastructure and capital projects is expected to be worth over US$9 trillion per year by 2025, according to PWC, more than double the US$4 trillion spend estimated for 2012. Growth in the global population, increasing urbanisation, and upgrades to outdated assets continue to drive spending across many sectors, including social (for example schools and healthcare), utilities (including water and sanitation), and transport.

These projects are typically funded by public spending, but many governments are heavily indebted. They are looking for other sources of funding, and they are eager to encourage private investment. Direct investment in specific infrastructure projects is usually limited to larger investors, but smaller investors can also gain access via listed entities such as infrastructure companies or investment trusts.

Investing in infrastructure comes with many attractive features. They typically offer a reliable stream of cash flows with the potential for growth linked with inflation. They also typically offer returns backed by a government sponsor, providing security of returns. In combination, these features mean that infrastructure can be a good source of returns that are lowly correlated with other mainstream investments. We believe infrastructure can play an effective role in a multi-asset portfolio, helping to diversify potential returns and offering a source of steady long-term performance.

Steve Waddington – Insight, a BNY Mellon company

Spending on infrastructure and capital projects is expected to be worth over US$9 trillion per year by 2025, according to PWC, more than double the US$4 trillion spend estimated for 2012. Growth in the global population, increasing urbanisation, and upgrades to outdated assets continue to drive spending across many sectors, including social (for example schools and healthcare), utilities (including water … read more

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A new golden age of rail

Chinese authorities have significantly built out high-speed rail as part of the current five-year plan and have made no secret of wanting to be the world’s leaders in terms of track length and number of lines. Now they have announced a ‘one belt, one road’ policy, also known as the ‘silk road’

The ‘one belt, one road’ initiative is designed to connect – via rail and sea – China to Europe through India and Africa in one direction, and to the South Pacific in the other.1 China is looking for ways to boost its economy now that its growth is slowing, and one way to do that is to look outward. The businesses working in China’s rail sector have in many cases worked with Western companies and, through technological share, obtained intellectual property that puts them on par with these global leaders.

The UK’s High Speed 2 (HS2) would represent just a small fraction of the record-breaking lines being built and planned in China. Phase one is designed to run 192km between London Euston and the Midlands, with phase two potentially extending to the North-West and North-East of England and perhaps even beyond into Scotland. Yet at an estimated cost of at least £50bn the funding behind HS2 has created some controversy and public support is patchy at best.

Justin Sumner – The Boston Company Asset Management, a BNY Mellon company

1 JOC.com, ‘What is China’s ‘one belt one road’?’

Chinese authorities have significantly built out high-speed rail as part of the current five-year plan and have made no secret of wanting to be the world’s leaders in terms of track length and number of lines. Now they have announced a ‘one belt, one road’ policy, also known as the ‘silk road’ The ‘one belt, one road’ initiative is designed … read more

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