Donald Trump's wall prompts investor stampede for infrastructure

 
Jasper Jolly
A US Border Patrol vehicle drives along
The Mexico/US border: where there's a wall in the way (Source: Getty)

Donald Trump’s promises to build a massive wall with Mexico as well as to revive oil pipelines have prompted an investor rush to gain exposure to infrastructure assets.

Inflows into funds focused on investments in the infrastructure sector surged in the last week, according to data provider EPFR.

On assuming the US presidency, Trump signed multiple executive orders, including one initiating his signature pledge to build a wall stretching 1950 miles from Tijuana in the west past Brownsville in the east.

Read more: Donald Trump to lay the foundations for Mexico border wall

Building materials and equipment companies have seen their shares rise in the last week. Mexican-listed cement company Cemex has seen some of the biggest gains, rising over 17 per cent since the start of 2017.

However, fears of a trade war with Mexico – and that Trump will follow through on his inauguration speech promises to “hire American – have stopped the copmany’s share price rise.

Shares in Irish company Cement Roadstone Holdings (CRH), which has significant US operations, have risen, while London-listed Ashtead Group, which rents heavy machinery, has seen its shares rise by more than three per cent since the start of the year, with most of the increase seen this week.

Read more: Donald Trump's $1 trillion plan sends bond yields and Dow Jones soaring

Meanwhile investors continued to warily back the broader Trump trade, as US equity funds saw inflows of $2bn in the week to 25 January.

Bond funds, which saw massive outflows in the aftermath of the election result in expectation of a reflationary boost to equities, saw 16-week inflow highs of $8.5bn.

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