According to stats published by Cleantech Investor magazine the performance of cleantech stocks in the final quarter of 2009 bodes well for the sector this year.
First, the cleantech indices that the magazine had been tracking nearly all achieved healthy gains.
Second, the pace of cleantech initial public offerings on stock markets gathered significant momentum in the latter half of the year. There was the C$100 million IPO of geothermal energy business Magma Energy Corporation on the Toronto Stock Exchange in August 2009.
In the same month, wind farm developer Indian Energy completed a successful completion of its IPO raising £9.75m in a placing with existing stakeholders and new investors to give the firm a market capitalisation on listing of £20.3m.
Then, US battery business A123Systems raised more than $400 million as it joined NASDAQ. A123Systems, which owns lithium-ion battery technology, received a very strong reception to its IPO with its shares closing almost 20% higher than their opening price on the first day of trading. Just last week A123 announced a battery supply agreement with Fisker Automotive, a new American automaker building premium green vehicles. The supply agreement is for battery systems for the Fisker Karma. The Karma plug-in vehicle is scheduled to be launched in late 2010 and expected to be one of the cleanest, most fuel-efficient cars in the world while still offering industry-leading style and performance.
None of this is to say that the cleantech sector is a dead cert for investors. It has benefitted from investors in poorer performing asset classes switching stocks to achieve better returns. But cleantech investors should be looking beyond the short term to the future.
We are now in a decade that will see gathering concern about climate change and resource depletion. We have also reached a point where government intervention and consumer demand are provoking business to make significant changes in their business models. We can expect to see innovation coming out of cleantech and that makes the sector a place for investors to focus their attentions.