I know that a few insto's have lightened up on weights on infrastructures while loading up on resource ,energy and biotech sectors. I believe if the markets get much more volatile, many funds will be looking for shelter back into the defensive stocks like mcg aix map bbi. Many are worried that inflation will kick in and so interest rates will rise mostly on the inflationary pressures of oil. This many believe will lower the cash flow value (discounting) of high dividend paying stocks. However, the last time this scenario happened in the mid 1970's we saw stagflation. High unemployment, high prices but negative growth. The Fed at that time did exactly the wrong thing...raise interest rates, which only exacerbated the downturn. I would be perplexed to see central banks continue to raise rates to battle oil induced prices rises, which already lends itself to a braking of the economy(high oil prices that is).
Finally, what I say to people in advisory positions is this, as oil prices rise, the amount of transfer wealth that occurs ie from western economies into opec/oil exporting countries is draining economic wealth away from our economies. It is a driver for investment into industries not dependant upon oil such as telecommunication/broadcasting infrastuctures and away from transportation and other high use oil dependant industries. Having said that, MIG TCL and other road-toll based infrastructures are ones that I am not invested in and believe the market will come to differentiate transportation infrastructure from other infrastructures such as mcg.
I have been in the game long enough to know it may take time but it's time will come. If you are thinking of selling now, you really have left it too too late as the stock has already corrected nearly 25% in only two months. Look at a yearly chart, we are at long term support. Cheers!
MCG
macquarie communications infrastructure group
