economy, international, investments, water privitization, water trade

Global Water Index: Investments for Privatized Water

You may have heard the phrase S&P 500 floating around, background noise as you listen to the news. But if you are a person with even an inkling of interest in the stock market, you will know the S&P 500 is an index exhibiting stocks of the top 500 publicly owned companies primarily from the US.

The S&P 500 shows the market value of the 500 companies in the index and is a good indicator of how the stock market is doing as a whole. The index will rise if the market value of a company goes up (with an increase in individuals interested in purchasing shares), and the index will decrease if the market value of a company goes down.

Well, what does this have to do with water, you ask.

The S&P 500 actually has little to do with water itself, but Standard and Poor’s (the company that created the S&P 500) recently released an index of the top 50 companies in the global water sector called the S&P Global Water Index. The Global Water Index is similar to the S&P 500 except investors use it to track viability of investments in the international water sector. The Global Water Index is comprised of 25 companies in water utilities or infrastructure and 25 companies in water equipment or materials.


Photo courtesy Pixieslayer on flickr.

Events such as the subprime mortgage crisis in the US and rising oil prices have really challenged the future of investments. Water, necessary to life and in demand everywhere on the planet, is thought the next big thing among some economists.

“One man’s challenge is another man’s opportunity. With water shortages an enormous challenge in both the developed and developing world, companies that transmit, purify, or supply equipment should benefit.”

– Forbes, ‘Ways to Play Water

Should individuals with money benefit on global shortages of drinkable water?

Individuals are already investing in the global water sector, and this will influence sustainable and available water supplies into the future. Such investments could drive-up the cost of implementing water infrastructure or treatment facilities for developing countries with dwindling budgets. In addition, among the ten most profitable companies in the Global Water Index are SUEZ Inc. and Veolia Environnement SA. These privatized water suppliers, as well as others in the index, have poor records of providing affordable and dependable water supplies.

For more information on water privatization, see this post on Waterblogged.info or listen to this CBC radio series (a little past due but still great), Water for Profit.

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