EU could shut the window on the carbon market
Banks warm to green products "People get carried away with the macro picture," says Nick Wood, head of Man Environmental Capital Opportunities. "It’s tempting to believe that businesses can be scaled up very quickly but clean-tech companies are not dotcoms, they are dealing with physical problems. People have been working on solar power for 30 years. Many of these companies are essentially manufacturers or engineering companies with a completely different kind of financial profile." The 30% collapse of share prices in the sector in a space of just two to three weeks in January 2008 brought home that reality for many investors.
"The renewable energy sector is set to enjoy impressive rates of growth for the next few years but the problem is that the market has already discounted most of it," says Valéry Lucas-Leclin, senior SRI analyst at Société Générale. "In January this year, renewable stocks had already priced in the next 20 years of growth, so it’s difficult to justify why prices should climb higher. The key now is stock picking and looking for companies with pricing power."