Adele Ferguson

THE Australian share market's move into bear territory yesterday, losing 7 per cent of its value, indiscriminately slaughtered most stocks. But it saved its biggest punishment for over-geared, opaque stocks with an exposure to overseas investments.

It is no surprise then that many of Australia's 24 listed infrastructure and utilities stocks were hit harder than the rest of the market. Stocks such as Babcock & Brown Power lost 10.5 per cent, Babcock & Brown Infrastructure lost 11.7 per cent and Babcock & Brown Wind dived 12.1 per cent, while Macquarie Airports lost 9 per cent.

Tony Shepherd, chairman of Transfield Services, which recently spun out Transfield Infrastructure Services Fund, said the recent selldown in the stock was irrational. "It is on a yield of 11 to 12 per cent tax deferred. All contracts are locked in and PPA (power purchase agreement) backed. The debt is locked in and hedged and they are in essential services," he said.

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Posted by dcjaya at January 23, 2008 3:07 PM