FTSE 100 movers: Water companies rally; ICG in the red

(Sharecast News) - London's FTSE 100 was down 1.3% at 8,089.42 in afternoon trade on Thursday. Water companies were the top performers on the index after regulator Ofwat announced its final determination for the five-year period to 2030, saying that average bills would increase by 36% in England and Wales, the equivalent of around £31 per year.

The amount is higher than the 21% Ofwat initially proposed but below the water companies' request for an average rise of 40%.

United Utilities gained after Ofwat allowed the company to increase bills by 32%, less than the 36% it requested. Severn Trent was also higher as the regulator said it could lift bill by 47%.

Russ Mould, investment director at AJ Bell, said: "The reputation of the water utility industry must be plumbing new depths usually reserved for lawyers and estate agents, and news of further price rises will have done nothing to burnish its standing with the general public.

"The market seems to be more favourable, judging by the increase in the share prices of Pennon, United Utilities and Severn Trent - even if the regulator hasn't allowed price increases quite on the scale the sector was looking for.

"A 36% average increase through to 2030 is a lot better from the perspective of these companies and their shareholders than the 21% suggested by draft determinations issued in July.

"This news may not trigger a flood of new buyers for water company shares given a lot of the increase in bills will go towards investing in creaking infrastructure. After all, with bills going up but problems around sewage spills and water outages continuing at current levels, some will feel this doesn't appear a sustainable state of affairs.

"The problem child in a family of delinquents remains Thames Water and the smaller than requested increase in bills it received is unlikely to be sufficient to resolve its financial problems."

Intermediate Capital Group was weaker even as Jefferies lifted its price target on the stock to 2,700p from 2,300p.

"ICG, like most European alternative asset managers, has been largely overlooked by a market appearing to only see US peers as the beneficiaries of a potentially highly constructive capital markets scenario in the next 12-24 months," it said.

The bank said it sees scope for at least a partial catch-up as that notion is gradually disabused.

FTSE 100 - Risers

Severn Trent (SVT) 2,590.00p 1.57% RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 1.10% United Utilities Group (UU.) 1,070.00p 0.61% Frasers Group (FRAS) 613.50p 0.57% Shell (SHEL) 2,429.00p 0.41% Centrica (CNA) 126.50p 0.20% Imperial Brands (IMB) 2,563.00p 0.20% Admiral Group (ADM) 2,607.00p -0.08% Vodafone Group (VOD) 67.18p -0.09% Reckitt Benckiser Group (RKT) 4,818.00p -0.10%

FTSE 100 - Fallers

Intermediate Capital Group (ICG) 2,056.00p -3.66% Mondi (MNDI) 1,154.00p -2.94% Pershing Square Holdings Ltd NPV (PSH) 3,764.00p -2.94% Barclays (BARC) 259.45p -2.85% Marks & Spencer Group (MKS) 381.30p -2.61% CRH (CDI) (CRH) 7,488.00p -2.55% Experian (EXPN) 3,517.00p -2.55% Antofagasta (ANTO) 1,597.50p -2.47% Informa (INF) 807.60p -2.46% easyJet (EZJ) 566.80p -2.44%