In April, equity markets recovered sharply after one of the weakest quarters in over a decade in Q1. This recovery was largely driven by large fiscal support programs announced by various governments, monetary stimulus by central banks, and the expectation of partial reopening of a few economies within Europe in May. During this month Partners Group Listed Investments SICAV – Listed Infrastructure also grew strongly with the recovery led by the sectors that had been underperforming in the first quarter, notably the airports and the pipelines. Though airports continued to report rather weak passenger data they benefitted from the fact that many have taken actions to increase their liquidity and were further boosted by announcements by various governments to provide state support. While oil prices remained low pipelines in the portfolio recovered as their take-or-pay clauses protect them from these sharp swings. The best performing company this month was Williams, which has shown a strong recovery driven by the CEO comments that the current low oil price is helping Williams, since it is driving more activity for gas-focused fields where Williams operates, and away from the Permian. The company also expressed confidence in retaining its ability to maintain dividend. This was reassuring for investors who believed that Williams may be forced to cut dividend after yield jumped to nearly 20% last month.

Atlantia was another beneficiary this month after a weak first quarter. The share price rose after it was revealed at Q1 results that the company has made an offer of EUR 2.9bn to the Italian government to settle the Genoa bridge collapse case. It also appears that Italian traffic declines seemed to have stabilised in April, which was another positive factor for the company.

Finally, Malaysia Airports benefited from a series of positive news last month. Air Asia announced plans to resume flights from its airports, the airport operator was exploring options to further increase its liquidity, and lastly there was news that GSV had made an offer to buy a controlling stake in the state carrier, Malaysia Airlines.

In May, Equity markets continued their recovery, after the sharp rebound in April. Partners Group Listed Investments SICAV – Listed Infrastructure increased in value this month, as a few large countries in Europe began reopening their economies, which helped the transport infrastructure sub-sector to improve.

Consequently, this month’s positive performance mainly stemmed from transport-focused portfolio companies, supported by improving traffic numbers, especially in Europe. Towards the end of the month, there was renewed tension between the US and China with respect to the special trade status granted by the U.S. to Hong Kong. This effect was, however, buttressed by the low exposure in the portfolio to HK-listed stocks. Sabesp, a Brazilian water and waste management company, was the top performer this month. The company’s share price increased sharply due to news that a water sector peer in Brazil was being considered as a candidate for privatisation. If progress is seen in the privatisation of its peer Copasa, then it is widely expected that Sabesp would also be a likely candidate for privatisation, offering significant upside potential. Elsewhere, Beijing Capital International Airport was negatively affected by the increasing tension between the U.S. and China over Hong Kong and a potentially reignited trade war. In addition, passenger numbers have declined sharply compared to the same period last year.

Finally, the share price of the French toll road operator Vinci increased in value. The company won two new construction contracts, which signalled that the construction industry is showing signs of a revival. Additionally, the easing of lockdown measures should especially benefit Vinci’s toll roads in Southern France, as well as its airport exposure. Finally, the company has reported solid liquidity at Q1 results, which provides protection if passengers and traffic numbers remain subdued over a long period.

In June, equity markets were rather flat after two months of continuous recovery, led by concerns over a second wave of the COVID-19 and the possibility of further lockdowns. Against this backdrop Partners Group Listed Investments SICAV – Listed Infrastructure performed negatively, largely driven by its exposure to pipeline and airport companies. On the contrary, the less GDP-sensitive sectors such as water, towers and social infrastructure operators stabilised the performance, while railways also held up well in an otherwise weak month for infrastructure. Top performer within the portfolio this month was Malaysia Airport. The share price rose strongly, largely attributable to the optimism around the reopening of the economy and easing on travel restrictions after 9th of June. The government’s new order allows most of local and foreign airlines to resume their international operations from July 2020 onwards.

In contrast, Fraport, a German transport company performed negatively in the reporting period. The share price was affected by news flow including a job reduction of up to 3,000 employees, or 14% of the total work force, and the continuously suppressed passenger traffic figures due to the various travel restrictions in place.

Finally, National Grid released its full year results in June, which were slightly ahead of expectations. The company achieved total asset growth of 9%, underpinned by a record GBP 5.4bn investment, mostly in the regulated networks business, which also belied concerns that the company could be severely affected from the current COVID-19 situation. Additionally, the financial position of the company remained strong.


Domicile: Luxembourg

Sources: Partners Group AG