26 September 2005
NOT FOR RELEASE IN THE UNITED STATES
Macquarie Bank today launched an internationally available index product providing unique exposure to the global listed infrastructure sector.
Earlier this year, Macquarie developed the Macquarie Global Infrastructure Index (MGII) series, the world's most comprehensive global infrastructure index series, with index provider FTSE Group (FTSE). The new product is being launched following strong investor interest in the index and the sector.
The product, a participation instrument tracking the Macquarie Global Infrastructure Index 100 (MGII 100), provides access to the top 100 infrastructure stocks in developed countries, which have grown from US$672 billion to US$1,100 billion over the past five years.
Macquarie Bank Head of Investment Banking, Nicholas Moore, said: "Investors are increasingly aware of the sheer scale of the listed infrastructure sector, which is currently worth in excess of US$1,600 billion."
"The trend of decreasing public sector investment and growing private sector investment in public works around the world indicates growth is likely to continue and infrastructure has become an asset class that investment managers cannot ignore," Mr Moore said.
The MGII 100 is based on the broader MGII, which comprises 251 companies principally involved in the management, ownership and or operation of infrastructure and utility assets. The product, an efficient and cost effective vehicle for tracking the MGII 100, represents between 85 per cent and 90 per cent of the capitalisation of the broader index itself, with risk reduced to eight currencies, against 21 currencies.
Macquarie Securities Global Head of Institutional Sales Basil McIlhagga said: "The MGII100 product provides wholesale investors with access to stable, long term earnings from essential services and an investment with low correlation to returns from other investment categories."
Since June 2000 the MGII100 has recorded a 9.9 per cent pa total return compared with the FTSE Global Equity Index return of 1.3 per cent pa.
"Given the strong past performance and the unique characteristics of infrastructure as an asset class, it's time for investors to seriously review their benchmarks. This product provides an efficient means of participating in the continued growth of the sector," said Mr McIlhagga.
The instrument is available either as a listed or unlisted product. It captures growth in the infrastructure sector, but the MGII100 index reduces latent political risk in developing regions where governments can influence the pricing regime of a concession.
Macquarie infrastructure analyst Ian Myles said the index, which has been well received since its launch in June this year, is the first to capture the worldwide growth in both infrastructure (particularly from growth arising from public private partnerships and privatisation of existing government assets) and from utilities (electric, gas and water). The index incorporates sub-indices constituting listed infrastructure entities from geographic regions as well as a range of sub-indices divided by sector such as utilities and transportation services.
"The strength of the infrastructure sector is that it is also not susceptible to the boom and bust that can affect broader global equities; this was reflected between 2000-2002 when FTSE Global All Cap Index declined by 46 per cent, yet the MGII declined by just 14 per cent." said Mr Myles.
The Macquarie Bank Group is a world leader in infrastructure, with Macquarie and its related businesses managing more than $A28 billion in infrastructure and specialist fund equity around the world through a range of listed and unlisted vehicles. Infrastructure investments managed by Macquarie include assets in transport, water, telecommunications and energy sectors across 16 countries, including Australia, the UK, Canada and the US, and Korea.
For further information, please contact:
Macquarie Bank Limited
Tel: (612) 8232 6016
Mobile: 0416 237 332
Media Relations, Hong Kong
Tel: (852) 9805 4070
Case Study (pdf 29KB)
The MGII can be accessed at www.ftse.com/infrastructure
This announcement has been prepared for publication in Australia and may not be released in the United States. This announcement does not constitute an offer of securities for sale in the United States and any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration. Any material provided herein is for information purposes only and does not constitute an offer, a solicitation of an offer, or any advice or recommendation to conclude any transaction.
Macquarie Bank Limited ABN 46 008 583 542 is authorized by The Australian Prudential Regulation Authority in the Commonwealth of Australia and The Financial Services Authority in the United Kingdom, to carry out banking business or to accept deposits in those respective jurisdictions. Macquarie Bank Limited and its related bodies corporate (the Macquarie Bank Group) are not otherwise currently authorised to carry out banking business or to accept deposits in any other country.