Q: I am puzzled as to why the pipeline stocks have been dropping substantially over the last few days. I would have expected these companies to hold up quite well as they are basically a toll road for oil and gas with a good dividend. I considered pipeline stocks as a good defensive holding. What am I missing?
5i Research Answer:
The market was in a 'sell everything' mood, and there was also additional concern on interest rates, which can hurt the sector. Then, oil prices collapsed before bouncing today. Alll of these are performing better than the overall market, and it is not really a sector that would right now give us cause for huge concern.