Strong interest in China water plays
Gains posted range from 42% to 116% in the past 3 months
INVESTORS may be wary of a hard landing for China's economy and China stocks listed in Singapore may be largely out of play, but China water-treatment stocks are clearly the exception - gains posted by the sector run from 42 per cent in the case of SIIC Environment Holdings to an amazing 116 per cent for Han-Kore Environment Tech over the past three months.
"It's important to understand what's driving the interest in water-treatment stocks," said OSK DMG analyst Sarah Wong.
"Over the past few years, the China government has raised water discharge standards, which means heavier capex that many private companies find difficult to fund. So those that are listed have an advantage because they can tap the equity markets for money while those that have state-owned enterprise (SOE) backing have an even bigger advantage."
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