ASIA - Asian infrastructure represents one of the best routes to capturing growth in the region's buoyant economies, J.P. Morgan Asset Management believes.
As Asian populations become more affluent, the region is experiencing stronger demand for all types of infrastructure, including electricity, roads, railways and phone lines, the manager said.
JPMAM chief investment officer for Asian infrastructure Vijay Pattabhiraman said the increased demand for infrastructure following years of underinvestment had created a situation where supply is unable to keep pace with demand.
"Asian infrastructure is becoming increasingly attractive as a proxy for capturing the longer-term growth outlook of the various Asian economies," said Pattabhiraman.
"Emerging Asia's large economies, such as China and India, are are significantly behind their more developed peers in the west, which we view as a tremendous opportunity in the upcoming years."
India currently languishes in the bottom 25 countries around the world in terms of electricity supply, but the government is attempting to remedy this by adding more than 175 gigawatts of new capacity over the next six years, creating attractive investment opportunities, Pattabhiraman said.
Five of India's largest private power developers are developing new power stations. However, India may struggle to power these stations on its own, since the country is forecast to suffer a large thermal coal deficit, according to JPMAM.
As a result, the country may be forced to import coal from Indonesia, the world's largest thermal coal exporter. Indonesia's economic output is increasing at around 5% annually, with Jakarta's Soekarno-Hatta International Airport handling more than 37m passengers last year, a 15% increase over the previous year, making it the fastest-growing airport in Asia Pacific (apart from China) in 2010.
"With India building power stations, Indonesia selling the required coal and China importing everything in between, it is clearly evident Asia is booming and private investment, as well as government spending, is funding this much-needed spend on infrastructure," said Pattabhiraman.
This week's edition of Professional Pensions is out now.
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.
The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.