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- FTSE 100 up 16 points
- Consumer confidence slides
- Mining stocks rally
Thames Water credit rating slashed further
Thames Water has faced further credit rating cuts after warning earlier in September that it only had enough cash to last until December.
Both Moody’s and S&P announced the cuts overnight, suggesting London’s water supplier was moving closer to defaulting on its debt.
S&P, which reduced Thames’ class A and B debt ratings to ‘CCC+’ and ‘CCC-’ respectively, said warnings that its cash could run out in December were unexpected.
“This announcement is contrary to our previous expectation in July, based on the company’s disclosure, that liquidity would last the company through May 2025.”
Moody’s also pointed to Thames’ “significantly tighter liquidity position than previously expected,” warning this could lead to default soon.
“This will likely lead in the near term to a distressed exchange, where creditors agree to some form of amendment or extension of credit terms that results in a loss,” Moody’s said.
“A distressed exchange of this type constitutes a default by Moody’s definition.”
Prudential, Standard Chartered rally as China doubles down on economic pledges
Further commentary from China over support to prop up its flagging economy has provided a boost for Asia-focused Prudential (LON:PRU) PLC and Standard Chartered (LON:STAN) PLC.
Insurer Prudential ticked up 6.3% on Thursday morning to top the FTSE 100’s risers, ahead of miners and Standard Chartered, which would all benefit from Chinese economic improvement.
Following a string of measures from China’s central bank earlier in the week, the country’s leadership on Thursday pledged “necessary fiscal spending” to meet targeted economic growth of 5%.
A readout at China’s monthly politburo meeting vowed to “respond to people's concerns, adjust home purchase restriction policies, lower existing mortgage rates and improve land, fiscal, tax and financial policies as soon as possible”.
This comes as China grapples with a sharp downturn its property market and a stoop in consumer confidence.
Rolls-Royce through to next round of UK mini-nuke competition
Rolls-Royce Holdings PLC (LON:RR) is among four companies to have been shortlisted for public support in building mini nuclear power plants in the UK.
Alongside Holtec Britain, GE Hitachi and Westinghouse Electric, Rolls-Royce will enter the next stage of negotiations with the UK government over support for small modular reactor (SMR) developments.
Though none have been developed in the UK yet, these mini-nuclear reactors are designed to be cheaper and quicker to build than conventional plants.
Two companies are expected to ultimately be offered government funding, with six originally having been involved in the competition.
EDF (EPA:EDF) previously withdrew itself from the running, while US-based NuScale was not selected for further negotiations.
Rolls-Royce SMR chief executive Chris Cholerton noted the FTSE 100 listed company was also 18 months ahead of rivals in the UK’s regulatory assessment process.
Selection for support would “help us to maintain this important first-mover advantage,” he added.
Oil majors dip
A combination of low fuel pump prices and a dip in Brent crude oil forecasts is weighing on big-cap oil stocks.
BP plc (LON:BP) is currently the biggest faller on the FTSE 100, having shed 4.3% from its share price, while Shell PLC (LON:SHEL) is currently off 3.7%.
Earlier this week, Rabobank estimated that Brent crude oil will fall to US$71 a barrel for the rest of the year and to average US$70 in 2025.
Rabobank had already reduced its forecast to US$82 for the rest of 2024 but recent confirmation of poor Chinese and US demand data and a looming glut of supply caused the Dutch firm to reassess its outlook.
The outlook coincides with petrol and diesel prices at the UK pumps hitting a three-year low.
Average petrol prices across the country’s forecourts hit 135.87p on Tuesday, said the RAC, having fallen from a peak of 192p in July last year.
RAC added there was scope for fuel prices to fall further over the months ahead as retailers pass on lower wholesale costs.
“A relatively low oil price, caused by lower demand globally, and a relatively strong pound are the two factors that are contributing to pump prices falling,” spokesperson Simon Williams said.
BP shares are currently swapping for 383p and Shell for 2,441p.
The broader FTSE 100 remains buoyant at 8,303, around 35 points higher from yesterday's close.
£10bn UK data centre coming to former Britishvolt site via Blackstone
US private equity firm Blackstone (NYSE:BX) is investing £10 billion in a new artificial intelligence data centre in Blyth, Northumberland, the former site of collapsed electric vehicle battery plant Britishvolt.
Prime Minister Sir Keir Starmer called the investment a significant vote of confidence in the UK, reinforcing the country's position as a global player.
The deal was facilitated by the Government’s Office for Investment and follows the collapse of Britishvolt, which had previously planned to build electric car batteries on the site at the coastal village of Cambois, across the river from the town.
Blackstone President Jon Gray highlighted the UK's strong talent and innovation as key factors in their decision, stating that the investment demonstrates Blackstone’s long-term commitment to Britain’s economic growth and digital infrastructure.