Chinese Companies To Lead Clean Tech Stock Rally

November 3rd, 2010 by Chris Milton

A clean tech boom on the stock markets is being predicted by one of Europe’s leading sustainability investment funds, and the boom will be fuelled by Chinese companies.

The math, says Nicola Donnelly of WHEB Asset Management, is pretty simple:

You can currently buy stocks in a Chinese smart meter company that has the same p/e as a European utility, but while the European firm is growing at two per cent a year, the Chinese firm is growing at 20 per cent a year … I know what I would invest in.

This is largely because China is embracing all technology, clean and otherwise, with enthusiastic vigour and has expanded its influence massively in Asia and Africa in the past couple of years.

By contrast, the US and Europe have been dogged by the regulatory uncertainty and commercial dithering which a totalitarian government doesn’t have to worry about.

This means, according to Donnelly, that many low-carbon firms in the US are hugely undervalued because there isn’t yet any clear investment advantage to clean tech.

However such uncertainty could well evaporate as states continue to promote green and clean tech agendas irrespective of federal legislation.

Similarly, if clean tech companies in China take off then national legislation will become less important as investors will look for US based companies to enter the international market and provide competition.

The only cloud on the horizon is stock markets’ proven ability to seize a trend and turn it into an over valued asset bubble. That, to coin a phrase, would be unsustainable.

^{Full Disclosure: my pension plan includes investment in WHEB’s Sustainability Fund.}

^{Picture Credit: China … worker by x-ray delta one under Creative Commons Share Alike License.}

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Tags: China, Europe, smart meters, Stock market, sustainability fund, US, wheb

About the Author

Chris Milton is a seasoned sustainability journalist focusing on business, finance and clean technology. His writing's been carried by a number of highly respected publishers, including The Guardian, The Washington Post and Scientific American. You can follow him on twitter as @britesprite, where he's one of Mashable's top green tweeters and Fast Company's CSR thought leaders. Alternatively you can follow him to the shops... but that would be boring.