Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17
Turning Point Nations On The Stage - 11th Oct 17
The Profoundly Personal Impact Of The National Debt On Our Retirements - 11th Oct 17
Gold and Silver Report – Several Interesting Charts - 10th Oct 17
London House Prices Are Falling – Time to Buckle Up - 10th Oct 17
The S&P Is A Bloated Corpse - 10th Oct 17
Are Gold and the US Dollar Rallying Together? - 10th Oct 17
Is Silver Turning? - 9th Oct 17
Bitcoin Needs Electricity, Gold CONDUCTS Electricity - 9th Oct 17
S&P 500 At Record High But Will Stocks Continue Even Higher? - 9th Oct 17
Gold and Silver on Major Buy Signal, The Cycle is Up - 9th Oct 17
How To Fight Corruption in the Philippines - 9th Oct 17
Stock Market Bulls Still in Charge - 9th Oct 17
DiEM25: Europe Without Nations or Religion - 9th Oct 17
Gold Price Readying to Rally - 8th Oct 17
Gold Price in Q3 2017 - 8th Oct 17
PassMark Bench Mark of OVERCLOCKERS UK Custom Built Gaming PC (5) - 8th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Profit From the Global Thirst for Clean Water

Stock-Markets / Water Sector Jul 28, 2010 - 08:29 AM GMT

By: Tony_Sagami

Stock-Markets

Best Financial Markets Analysis ArticleAbout the same time I was traipsing around Singapore last month, around 14,000 of the world’s top business, academic, and government experts from 85 countries gathered in Singapore to learn the newest water-technology developments at the Singapore International Water Week 2010 conference.

The global economy may be filled with uncertainly, but the world’s thirst for water is growing like mad. FACT: A total of $2.8 BILLION worth of water infrastructure deals were concluded at the Singapore conference.


All those billions are being spent for one reason: Clean drinking water is in short supply. It is estimated that the lack of pure water is the single greatest killer in the world: Four children die each minute from illness caused by a lack of drinking water.

The problem is not that the world is running out of water. There is exactly the same amount of water today as there was a million years ago, but a soaring global population and groundwater pollution is creating an acute shortage.

Only 2.5% of the world’s water is fit for human consumption and two-thirds of that is locked away in icecaps and glaciers. This percentage has been fixed since the last ice age.

Water is not like gold or oil where a new discovery will suddenly increase the supply and there is no substitute for water.

Clean drinking water is in short supply, thus a potentially valuable commodity.
Clean drinking water is in short supply, thus a potentially valuable commodity.

According to the International Water Management Institute (IWMI), one-third of the world’s population is short of water. In fact, water is expected to become so scarce in the future that the vice president of the World Bank warned that “the wars of the next century will be about water.”

Yikes!

Clearly, there is some investment opportunity buried in that need for clean drinking water. The easiest way, as usual, is through exchange traded funds. There are four that specialize in water-related stocks.

  • First Trust ISE Water Index Fund (FIW) has a 61.9% weighting in industrials; 22.4% in utilities.
  • Claymore S&P Global Water Index ETF (CGW) has a 43.9% weighting in industrials; 32.5% in utilities.
  • PowerShares Water Resources Portfolio (PHO) is the largest water ETF, with $1.04 billion in assets; 84.8% industrials; 12.3% utilities.
  • PowerShares Global Water (PIO) has a 50.5% weighting in industrials; 32.7% weighting in utilities.

All have similar goals, so it pretty much depends on whether you want to invest in the water delivery companies (utilities) themselves or companies that are creating the hardware and technology to clean up the water.

Seven Unsettling Water Factoids:

  1. The average American lets eight liters of water go down the sink while brushing their teeth. Americans use 25 times the amount of water on a daily basis than emerging country counterparts. Two-thirds of the world’s fresh water is used to irrigate crops. Americans drench their gardens with seven billion gallons of water a day. 80% of China’s rivers are too polluted to support fish life. 1.1 billion people globally have no access to clean water.
  2. China has 21% of the world’s population, but only 7% of the water.

If you’re more of an individual stock investor, you should take a look at Singapore-based Hyflux, one of the most exciting (but high-risk) water companies that I’ve found. Hyflux has developed advanced membrane technology that has modernized the water purification industry and is recognized as one of the world’s leading water treatment companies with operations in Singapore, China, India, and Dubai.

Hyflux was the first water treatment company to be listed on the Singapore stock exchange in 2001 and was added to the Straits Times Index — the Singapore equivalent of the Dow Jones — in March of 2005.

Hyflux’s secret weapon is its revolutionary seawater desalination technology. Desalination is the process that removes salt, minerals, and impurities from seawater to produce potable drinking water.

Hyflux’s patented reverse osmosis system uses permeable membranes to filter out dissolved material or fine solids.

Hyflux’s SingSpring desalination plant is Singapore’s first seawater desalination plant and delivers 10% of Singapore’s water needs. The plant produces 136,380 meters of clean drinking water a day and was recently awarded the Desalination Plant of the Year by Global Water Intelligence for its contribution to the international desalination industry.

Water purification and treatment facilities are the wave of the future.
Water purification and treatment facilities are the wave of the future.

In fact, the Singapore government is so enamored with the SingSpring plant that its government investment arm, Temasek Holdings, recently purchased a 50% stake in it. That tells you volumes about how central desalinization is to the future of Singapore.

Hyflux isn’t the only company in Singapore working on new water purification technologies. Singapore is already home to more than 50 water-engineering companies with an emphasis on innovation, research and development. They include GE, Siemens and Black & Veatch Corp. of the U.S.; Delft Hydraulics of the Netherlands; and Nitto Denko of Japan.

At least as important, Singapore has two world-class research universities and 12 research institutes dedicated to water engineering, employing hundreds of scientists.

It also touts its strategic location in Asia where India, China and Vietnam invest heavily. “A lack of clean water and the destruction of the environment are acute problems in Asia, a region home to almost three billion people,” according to Singapore’s Economic Development Board. “This presents vast opportunities.”

Hyflux does trade on the over-the-counter U.S. pink sheets market under the ticker HYFXF.PK and has very thin trading volume, but is actively traded on the Singapore stock exchange as 600.SI.

Don’t rush out and buy Hyflux tomorrow. The desalinization opportunity is a long, multi-decade story, so you will have plenty of time to wait for it to go on sale.

But make no mistake, water is going to be one of the most powerful and most lucrative investment trends you will see in your lifetime and Asian water companies, like Hyflux, should be some of the biggest winners.

Best wishes,

Tony

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife