Australian Cleantech Outfits Are Having A Rough Time  

Giles Parkinson has an article on market troubles for the Australian cleantech industry - Cleantech Outfits Are Having A Rough Time.

Since outperforming both the benchmark S&P/ASX 200 and the S&P/ASX Small Ords indices in 2007, the 75 companies that make up the ACT Australian CleanTech Index (once valued at $16 billion but now worth $10bn) have seriously underperformed those broader indices in each of the 2008, 2009 and 2010 first-half financial years. Essentially, the index fell harder than the rest of the market and recovered less.

Now it's falling again. Figures for December show the CleanTech Index down 6.2 per cent for the month, compared with 1.7 per cent gains in the broader index and a 3.8 per cent gain in the small caps. ...

The index and its components are also vulnerable to the vagaries of government policy.

The December slump coincided with the defeat of the emissions trading legislation and disappointment in Copenhagen, which hit carbon offset stocks such as Carbon Conscious and CO2, and the allocation of renewable energy grants.

Those that missed out, including Carnegie Wave and Kuth Energy, were among the hardest hit. Solar PV installers such as Quantum Energy went on a roller-coaster ride that pretty much followed government policy.

Companies such as Jackgreen went into administration, while others, such as Geodynamics, slumped after nearly sending its board of directors into orbit with a blowout at its flagship well.

The best performer for the past month was solar cell innovator Dyesol. Biodegradable packing group Pro-Pac Packaging was the best performer for the latest quarter, while biodegradable nappies producer Eco Quest was the best performer for the half, trebling its share price, mostly in the first quarter.

It's hard to read any trend in the various components of the cleantech index. Solar, which performed well in the 2007 fiscal year and last year, underperformed in 2008 and so far this year, while wind, which boomed in 2007 but fared poorly in 2008 and last year, has performed better so far this year, as have the energy efficiency, geothermal and environmental services sub-indices.

Perhaps they could be neatly plotted against a graph highlighting policy hope, policy promises, and policy delivery over the same period. O'Brien says the volatility highlights the relatively immaturity of listed stocks in the area.