"I am very interested in the company, Kardan Group, from an EM real estate and Banking view. But, my main interest lies in their water business. The water division is called Tahal, at the moment it's small, but I see it has having vast potential. Tahal is focused on EM and they already have a foothold in China. I have already purchased a few shares (in the same way that I stay for a few drinks). Before I go waist deep, I'd like a few professional or knowledgeable opinions. Can we appeal to the collective to start a few days of emails and comments on clean water in general and EM clean water in the specific?"

Eoin Treacy's view Thank you for this question. I too am interested in the water sector because on paper it appears to be the ultimate Supply Inelasticity Meets Rising Demand theme. However, it has historically been difficult to identify promising ways of profiting from the sector.

Singapore listed Hyflux is one of the more high profile participants in the water sector. However, the share has been largely rangebound since 2005 and will need to sustain a move above S$2.50 to indicate a return to medium-term demand dominance. Such has been the size of the range that the share is would be best bought following a reaction.

A delegate at the recent Singapore Chart Seminar, who works for a European company in the Chinese water sector recounted his experience there over the last decade.. He said that while China was seen as an essential market for his company, that it was hard for foreigners to profit because they were forced to take on local partners and because the state owned utilities decided how much they were willing to pay rather than the other way around. I do not know how Kardan could be affected by such a culture but quote the story merely as a cautionary tale. .

As you mention Kardan is primarily a real estate developer so it may be more instructive to compare it to that sector. If we compare Kardan's chart to other emerging market property developers such as Rossi Properties in Brazil, Urbi Desarrolos Urbanos in Mexico, Land & Houses in Thailand, Bumi Serpong Damai in Indonesia and Austrian listed Immofinanz which is also focused on Eastern Europe, a common chart pattern becomes evident. They have all been ranging for a relatively lengthy period and will need to sustain breakouts to new recovery highs to indicate returns to medium-term demand dominance.

Hong Kong property developers such as Cheung Kong Holdings and Sun Hung Kai Properties have outperformed. Both appear to be in the process of finding support in the region of the upper side of their respective 2009/10 ranges and would need to sustain moves below their recent lows to question potential for some additional higher to lateral ranging.