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Index defies market turmoil as clean energy fundamentals boost performance


The WilderHill New Energy Global Innovation Index has continued its strong performance in the third quarter, gaining 8.2 per cent to finish at 408.22.

The WilderHill New Energy Global Innovation Index has continued its strong performance in the third quarter, gaining 8.2 per cent to finish at 408.22. This left it 41 per cent higher than at the beginning of the year, in spite of global turmoil in the markets that hit returns on other indices.

It comfortably outpaced the Nasdaq Composite Index, which rose 3.8 per cent, the S&P 500’s 1.8 per cent growth and the 2.1 per cent gain for Amex Oil, suggesting that investors believe the fundamental drivers for the sector – including concerns over climate change and regulatory pressures – are strong and likely to remain so.

Solar stocks were once again the strongest performers, gaining 25.09 per cent in the third quarter, following a rise of 53.9 per cent in the first half of the year, as the continuing shortage of silicon lifted margins. Eight of the top 20 gainers in the index were solar stocks, led by LDK Solar, the NYSE-listed Chinese maker of photovoltaic wafers, which more than doubled. Its shares gained 128 per cent as it followed its June market debut with increased production targets and a massive increase in capacity.

However, Biofuels, Biomass and Waste-to-Energy continued to suffer the hangover from last year’s exuberance, ending the three months to the end of September 14.14 per cent lower, with the worst performer being Schmack Biogas, the German biogas project developer. Its profit warning was punished with a 67 per cent share price fall, showing that investor sentiment for the sector remains fragile. The sector provided seven of the 10 worst-performing shares in the index.

Chinese bioethanol producer Anhui BBCA produced the sector’s best returns as it rose 21.8 per cent despite reporting widening losses for the first half, but the malaise gripping the sector appeared to be global, as fears over sustainability and crowding out of food crops combine with high corn prices and the weak dollar cancels out the effects of oil price rises.

The demand-side energy saving sector illustrated the volatility that continues to be a feature of the clean energy sector, providing the second biggest jump in share price for the quarter as well as the second biggest faller.

Echelon, a US-based smart metering company, saw its stock rise 77.4 per cent as it announced a series of orders in Russia, Austria and with restaurant chain McDonalds. Shares in German building energy-saver Centrotec lost 60.1 per cent in spite of an increase in sales as the company issued new shares.

The sector continues to garner government and investor support, with one of the first half’s best performers, lighting systems developer Color Kinetics, leaving the index after being bought by Philips for USD732m.

Renewables, chiefly made up of geothermal companies, enjoyed a positive three months as the market took heart from the prospects for the technology. Energy generator Ormat Technologies led the way with a 22.6 per cent increase. Among Power Storage companies, Byd, the Chinese maker of recyclable batteries, rose 32.8 per cent as first half profits jumped 47 per cent while a series of orders pushed shares at US-based Ultralife Batteries 22.1 per cent higher.

Following the takeover battle for Germany’s Repower Systems in the first half, the wind sector experienced a quieter period, gaining just 5.43 per cent.

Meanwhile, the quarterly rebalancing of the index sees the number of shares it covers rise to 88 from 86. Five stocks enter the index – Zhejiang Yankon, a Chinese producer of energy-saving lamps; Enernoc of the US, a maker of software systems that help utilities manage distributed energy networks; the German biogas project developer EnviTec Biogas, which raised EUR141m in a July initial public offering; Solaria Energia y Medio Ambi, a Spanish PV module and passive system manufacturer and installer; and Roth & Rau of Germany, a maker of equipment for the manufacture of solar cells.

Leaving the index are Washington State utility Puget Energy, Marubeni, the Tokyo-listed Japanese trading and wind power development company, and SGL Carbon, the Frankfurt-listed manufacturer of carbon, graphite and composite products for industrial and aerospace applications. After the reshuffle, the NEX boasts 19 Asia- or Australasia-listed stocks, 35 listed in Europe, the Middle East or Africa, and 34 listed in the Americas.

The WilderHill New Energy Global Innovation Index is published by WilderHill New Energy Finance, a partnership between New Energy Finance in London, and Joshua Landess and Robert Wilder based in the US. The index represents all significant sectors of the low-carbon energy industry, including renewable energy, biofuels and emerging low-carbon technologies. It has an extensive global representation including Europe, Asia-Pacific, and the Americas. Component are limited to 5 per cent of the index by weight at rebalancing.

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