CSAM tips UK infrastructure, education stocks

LONDON (Reuters) - Credit Suisse Asset Management CSAM.L is tipping UK infrastructure, education and security stocks to weather the downturn, as beneficiaries of government spending.

Phil True, CSAM's head of UK institutional equities, said CSAM was pursuing a mix of defensive and cyclical themes. He likes the infrastructure story, believing that although some investment might be postponed, there is still a need to upgrade power, rail and road networks.

"If anything, there will be a greater emphasis on government spending in this area, just to keep the economy on an even keel," he told Reuters.

In this sector he cited International Power (IPR.L), an electricity generating company with interests in 20 countries. "The balance sheet has quite a bit of debt but there are no immediate issues with their financing." International Power is up 15.3 percent in the last month against the FTSE All-Share .FTAS.

True expected education to be another beneficiary of government spending through the downturn, citing Pearson (PSON.L) as a good example. "We own this for its US education exposure."

Pearson has performed well against the FTSE All-Share in the last 12 months, up 31.1 percent, and is up 11.7 percent against the index in the last month.

Another defensive theme True highlighted was security: "Saudi is still spending a lot of money on planes, and we expect to see more spending on homeland security initiatives such as securing government networks and additional screening."

In this area he cited BAE Systems (BAES.L), which is up 7.6 percent against the FTSE All-Share in the last month, and 10.6 percent against the index in the last 12 months.

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