While economic recovery in the leading industrialised nations has lacked vigour,
there has been notable economic growth in emerging nations. Nomura expects the
decoupling of developed and emerging economies to continue, and forecasts real
GDP growth of 6.9% y-o-y for emerging economies in 2010, versus 2.2% for the
leading industrialised nations. Brisk infrastructure investment is one factor
driving growth in emerging economies. Accordingly, Nomura thinks infrastructure
investment in emerging countries will remain a key investment theme.
Among the various types of infrastructure investment, Nomura believes a
considerable amount will be spent on infrastructure related to water resources.
Water, essential for human survival, is needed also for growing crops and for
various industrial production processes. It is therefore an essential resource
for the development and promotion of industry, and Nomura sees water
infrastructure as a high-priority area in which large-scale investment is
likely.
Highlights
§ Freshwater scarcity, population and economic growth, and unlimited
saltwater resources are key drivers underpinning growth in desalination
§ Installed capacity could almost double over the period to 2016 suggesting
US$105bn of capex requirement
§ MENA is set to be the key region, accounting for over half of the expected
investment in this timeframe
§ There are opportunities to participate in the theme via EPC contractors,
plant operators and suppliers of key parts such as membranes and pumps
