Is it just us, or is the market actually buoyant?
Published April 5th, 2018
With ten days to go, this year’s Global Water Summit looks like it is going to be a monster. Registrations are 15% ahead of last year, and we are starting to worry about running out of space. What does this kind of thing say about the market?
Here are my thoughts:
1) The Global Water Summit correlates positively with opportunities in emerging markets and negatively with opportunities in mature markets. Most people want to develop international markets when the outlook in their home market is weak and foreign markets look relatively attractive. The exception is when they are doing so badly at home that they can’t spare attention for non-core business activities.
2) What is most interesting is who is not there. We have no significant Chinese companies showing up. This is because the Chinese government has sharply increased the cost of capital in recent months. It means that the Chinese companies which used to be prepared to buy their way into international projects and pay crazy money for acquisitions are holding back, conserving their capital and waiting for government policy to become more clear.
3) Saudi Arabia is the biggest game in town. Our Saudi Privatisation Workshop looks like it is going to be a sell-out. No other country is trying to do so much in so little time. We have a government delegation of 20, and a further 35 delegates from private companies. Potentially they are going to need $60 billion over the next decade. It is a serious business.
4) In terms of other emerging markets, Argentina, Kenya, and Nigeria are well represented. I think these governments are most interested in tapping into international sources of finance. A dozen other countries have sent high-level delegations, attracted in part by the World Bank’s Blended Finance Workshop. My hope is that better access to finance means better procurement.
5) Industrial interest in water is growing. Usually it is hell’s own job trying to get industrial water users to attend a water conference: it is not their business. This year, by focusing on industries with particular challenges such as oil & gas, microelectronics, mining, and textiles, we have had people coming to us rather than the other way around.
6) Digital and desal are a pull. I often worry that digital will prove a passing fad. It is certainly more talked about than implemented, but talking to various public sector people coming to the event, I feel that interest is still growing strongly. As for desal – Happy Days Are Here Again!
See you in Paris!