Proactive Investors -
- FTSE 100 up 18 points to 8,211
- Thames Water bills to rise
- UK economy grows more than expected
FCA overhauls UK listing standards
The Financial Conduct Authority has unveiled the biggest overhaul of UK listing requirements in decades, aimed at rejuvenating London’s flailing capital markets.
The primary goal of the overhaul is to make it easier and more attractive for companies to list their shares in the UK, with the biggest change being the scrapping of Britain’s two-tier listing structure.
Historically, Listings have been divided into primary and secondary segments, with the latter having stricter reporting standards.
A single category called ‘commercial companies’ will replace this structure when the rules into into effect at the end of this month.
Key changes include removing the need for shareholder votes on significant or related party transactions and allowing flexibility around enhanced voting rights.
A more detailed breakdown of the changes is available here.
Water companies buoy market after Ofwat review
More on the water sector where share price reactions suggest a bullet had been dodged especially by SouthWest Water owner Pennon (LON:PNN).
Its share price is up by a thumping 6.3% to 658p.with Severn Trent (LON:SVT) up 2.7% at 2,687p, and United Utilities 2.3% higher at 1,090p
Indeed, Severn Trent and United Utilities are Footsie's biggest gainers after Ofwat’s latest decision on price rises between 2025 and 2030.
Midlands-focused Severn Tent had asked for a £144 rise over the five years, but got £93 (23%). United Utilities gets a £94 rise (21%) while Pennon’s South West Water arm gets a £64 (13%) rise. All exclude inflation.
Ofwat said in total, an average bill will rise by £19 a year and pay for £88 billion of spending by the sector of which £35 billion will be directed towards fewer sewage spills and better water quality, including £10 billion for storm overflows.
Footsie up 18 at 8,211.
The morning so far
The FTSE 100 shifted to and fro when trading commenced this Thursday, but it ultimately looks to be heading in the right direction.
As of 8.55am, the blue-chip index was trading 15 points higher at 8,208, supported by a raft of bullish economic announcements.
GDP figures show that the economy grew by 1.4% year on year in May, outstripping the expected growth rate of 1.2% and doubling April’s 0.7% gain.
Month on month, gross domestic product grew by 0.4%, an upside surprise following a zero-growth period in April, though the data still shows “significant room for improvement under the incoming Labour government”, according to Rob Morgan, chief investment analyst at Charles Stanley.
Construction output, meanwhile, advanced by 0.8% year-on-year in May, marking a strong rebound from a 2.1% drop in the prior month and exceeding market expectations of a 1.9% decline.
Water firms Severn Trent PLC and United Utilities Group PLC (LON:UU) were the two biggest FTSE 100 risers of the morning.
This follows regulator Ofwat’s latest draft determination, which sets the pricing and investment agenda for British water firms.
On average, water bills are set to rise 21% by 2030, Ofwat declared.
Though this is less than what the water firms wanted, Severn Trent is higher following a decent first-quarter financial update.
Elsewhere in company news, Dr Martens (LON:DOCS) has published a bare trading update prior to its AGM meeting this morning.
The classic British footwear company said that “trading since the start of this financial year has been in line with expectations and our guidance for (financial 2025) remains unchanged”.
Construction output grows
Construction output in the UK advanced by 0.8% year-on-year in May 2024, according to the Office for National Statistics.
This marks a significant rebound from a 2.1% drop in the prior month and exceeded market expectations of a 1.9% decline.
It was the first expansion in construction output since January.
The increase was driven by a 7.7% rise in repair and maintenance activity, up from 6.4% in April, while new work saw a smaller decline of 4% compared to 9.4% previously.
Dr Martens targets growth in US direct-to-customer market
Dr Martens has published a bare trading update prior to its AGM meeting this morning.
The classic British footwear company said that “trading since the start of this financial year has been in line with expectations and our guidance for (financial 2025) remains unchanged”.
The first quarter is typically “the smallest period of our financial year, representing the end of the Spring/Summer season”, said the group, adding that the current financial year will be weighted to the second half.
“The upcoming Autumn/Winter 24 season remains a key focus,” said Dr Martens, with detailed trading plans currently being implemented.
Dr Martens is targeting target positive direct-to-customer growth in the US in the second half of the current financial year.
“Work on our cost action plan is ongoing and we will provide a detailed update at our first half results in November.”
Shares were up 1.6% in opening exchanges.