The investment opportunities in the innovation-led listed satellite and telecommunication infrastructure sectors

Muhammad Jufri Marzuki and Graeme Newell

Journal of Property Investment & Finance, 2020, vol. 39, issue 3, 223-238

Abstract: Purpose - Communication infrastructure assets present a compelling investment opportunity for investors interested to tap into the technology-driven and innovation-led infrastructure segments, given the need for intensified capital deployment to prepare for the future substantial flow in volume and velocity of information. These communication infrastructure assets exist either in the segments of satellite or telecommunication infrastructure. This paper intends to empirically assess the performance attributes of listed satellite and telecommunication infrastructure over January 2000–June 2019. Sub-period performance dynamics of listed satellite and telecommunication infrastructure in the pre-GFC (January 2000–June 2007) and the post-GFC (July 2009–June 2019) investment horizons are provided. Design/methodology/approach - Nineteen-year monthly total returns over 2000–2019 were used to analyse the risk-adjusted performance and portfolio diversification potential of both listed satellite and telecommunication infrastructure. The mean-variance portfolio optimisation framework using the full period and post-GFC ex-post returns, risk and correlation coefficient of listed satellite and telecommunication infrastructure and other financial assets was developed to determine the added-value benefits of listed satellite and telecommunication infrastructure in an optimised investment framework. Findings - Listed satellite and telecommunication infrastructure delivered mixed investment performance. They were highly volatile and there was a significant discount in total return performance against the other asset classes in the full and pre-GFC periods. However, listed telecommunication infrastructure delivered stronger performance in the post-GFC period across all performance measures. Listed satellite and telecommunication infrastructure offered strong diversification benefits for investors across all investment horizons. Further, the inclusion of listed telecommunication infrastructure in both the full period and post-GFC mixed-asset investment framework was also empirically justified. Practical implications - Communication infrastructure assets such as satellite and telecommunication infrastructure are the key infrastructure assets to ensure the seamless operation of and interaction with modern technology going forward. Whilst being a small proportion of the overall infrastructure asset class universe, the $2.1 trillion progressively expanding listed communication infrastructure sector is having an important role to stimulate investor capital deployments in high quality and future-proof communication infrastructure assets. Listed satellite and telecommunication infrastructure assets are an opportunistic investment given their future growth potential and are seen as a suitable fit for investors with a secular investment profile. Originality/value - Despite the infrastructure asset class being the focus of growing attention and empirical analysis, no previous studies have empirically investigated the listed satellite and telecommunication infrastructure sectors. This is the first published empirical research analysis that aims at articulating the investment attributes of listed satellite and telecommunication infrastructure as a route for exposure in technology-related infrastructure assets. This research validates and informs practical property investment decision-making for investors seeking exposure in the increasingly important communication infrastructure assets sector.

Keywords: Satellite; Telecommunication; Communication; Listed infrastructure; Risk-adjusted performance; Mixed-asset portfolio (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:jpif-10-2019-0132

DOI: 10.1108/JPIF-10-2019-0132

Access Statistics for this article

Journal of Property Investment & Finance is currently edited by Nick French

More articles in Journal of Property Investment & Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().