• Home
  • Investment
  •  
    Retirement
    • Pensions
    • Income
    • Investment
    • Regulation
    • Estate planning
    • Equity release
  •  
    Your profession
    • Adviser tips
    • Business models
    • Companies
    • People
  • Regulation
  • Tax planning
  • Protection
  • Diversity
  • Events
  • Whitepapers
  • Industry blogs
  • Multi asset
  • Newsletters
  • Sign in
  • Events
    • Upcoming events
      event logo
      Professional Adviser 360 2018

      Introducing the brand new Professional Adviser 360 event taking place on 24th April 2018 at The Brewery in London.

      • Date: 24 Apr 2018
      • The Brewery Chiswell Street London EC1Y 4SD, London
      event logo
      Retirement Planner Forum 2018

      Retirement Planner is committed to delivering best practice advise and discussion to our audience of professional retirement advisers and planners. This half day conference includes the opportunity for interaction and debate between delegates and speakers as they share unique insights.

      • Date: 15 Jun 2018
      • The Waldorf Hilton Hotel Aldwych London WC2B 4DD, London
      event logo
      Retirement Planner Awards 2018

      The annual Retirement Planner Awards is taking place on Friday 15th June 2018. Submit your entries by 6th April.

      • Date: 15 Jun 2018
      • The Waldorf Hilton Hotel Aldwych London WC2B 4DD T, London
      event logo
      Investment Marketing and Innovation Conference 2018

      The Investment Marketing and Innovation Conference returns on the 29th June 2018 at The Brewery. Join us to hear about all the marketing trends.

      • Date: 29 Jun 2018
      • The Brewery 52 Chiswell St London EC1Y 4SD, London
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up
  • Whitepapers
    • Latest Whitepapers and Reports
      When only the best will do in multi-asset funds

      Active managers who follow a rigorous, long-term investment approach, can boost the performance of multi-asset funds.  Read more about the case for including actively-managed funds in multi-asset portfolios. 

      Capital at risk. 

      CI064244  02/2018
      Download
      Friend or Foe: Bond markets in 2018

      As central banks move away from ultra-loose monetary policy, and the global economic expansion matures, bond fund managers will need to ensure their portfolios draw on a truly diverse range of sources of return and carefully consider portfolio risk if they are to generate yield in the current market environment.

      Download
      Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Sign in
  •  
    •  

      Personalise your on site experience

      Download and use the apps

      Access your subscription from outside of the office

      Get relevant news and insight straight to your inbox

      Sign in
     
     
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • RSS
    • Twitter
    • LinkedIn
    • Newsletters
  • Register
  • Industry blogs
  •     Multi asset
Professional Adviser
Professional Adviser
  • Home
  • Investment
  • Retirement
  • Your profession
  • Regulation
  • Tax planning
  • Protection
  • Diversity
 
  •  

    Personalise your on site experience

    Download and use the apps

    Access your subscription from outside of the office

    Get relevant news and insight straight to your inbox

    Sign in
 
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
Professional Adviser

Market is cautious over cross selling in utilities

  • /home/progs/thaira/archive/invweek/mark/uk/200011/06uk01.xml
  • 05 December 2000
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
0 Comments

The water sector has rebounded over recent months but sentiment for the utilities sector remains neg...

The water sector has rebounded over recent months but sentiment for the utilities sector remains negative due to the impact of regulations.

The rise in water stocks is due to several factors, says David Bertocchi of Baring Asset Management's UK specialist team.

He says: "There is a general uncertainty in technology and growth which has led investors towards defensive stocks."

He adds the competition commission review on Mid Kent and East Surrey Holdings has had an effect: "These small companies challenged regulations. They were the only two that did and were largely successful, which indicated hope for the sector. The key regulation that was challenged was to change the cost of capital that businesses are allowed to earn, leading to improved capital costs and earnings.

"This does not change much in the short-term but will make the next review, in five years, look more hopeful."

There was also a bid by RWE for Thames Water, which stimulated investor interest. Bertocchi says: "It is probably a one-off, as excessive M&A activity will not be permitted due to competition issues."

Martin Cobb, senior portfolio manager of UK equities at Colonial First State, says there have been spikes in the water sector but nothing great in absolute terms.

He says: "They are defensive shares, so perform better when other sectors are weak. Water prices bottomed in April, but people are buying again as it had a good run in the second quarter. Since the 25 September takeover of Thames Water it has had a strong run, however, it is still 50% off its high."

Cobb does not believe it will reach previous highs due to regulatory restrictions. He adds: "The regulator made conditions tougher. Now there are cost cutting and profit-up requirements, which is difficult for the water companies." He does not believe that prices will rise much further, unless there is more consolidation.

The water sector is simply coming off some lows, says Bertocchi. "These events do not signal a long-term upswing in share prices, if technology collapsed then water would be a safe haven.

"Water is still trading at a discount, between now and the next five-year review this will close. However, each new regulation can change everything."

Cobb points out that utility companies are much less homogeneous than they were. He cites Centrica as an example, which now supplies gas to customers and has a financial arm.

Utilities are attempting to expand their customer base through cross selling of other services but Bertocchi is undecided as to whether cross selling adds value. He says: "Companies are trying to extract value from customers and are seeing the opportunity to sell additional products. These plans have potential, but we do not know whether they are workable."

Cobb holds Centrica and is looking to buy Innogy, a demerged company of National Power, which has recently changed its trading arrangements. He says: "Innogy has a new technology for efficient electrical storage, called Regenesys, developing a pilot battery which should be out in three to five years time."

Fiona Henderson

Related articles

  • Paul Resnik: Why IFAs must get intimate with clients 
  • Orbis' Brocklebank: We welcome the rise in passives
  • PA360: FCA wants watertight documentation on pension transfer advice
  • Rory Percival: FCA will find advice market is non-competitive
  • 'Kill your darlings' and embrace tech to serve lower value clients, advisers told
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  

More news

  • Charging
Paul Resnik: Why IFAs must get intimate with clients 

Speaking at PA360

  • 24 April 2018
Dan Brocklebank of Orbis Investments
  • ETFs
Orbis' Brocklebank: We welcome the rise in passives

Shone a light on 'closet trackers'

  • 24 April 2018
  • Pensions
PA360: FCA wants watertight documentation on pension transfer advice

‘Documentation, documentation, documentation’

  • 24 April 2018
  • Regulation
Rory Percival: FCA will find advice market is non-competitive

'It will have to lead with product intervention and product governance'

  • 24 April 2018
  • Technology
'Kill your darlings' and embrace tech to serve lower value clients, advisers told

Speaking at PA360

  • 24 April 2018
Back to Top

Most read

Rory Percival: FCA will find advice market is non-competitive
 darren-smith.jpg
Darren Smith: Driving client trust
British Steel pension adviser pulls out of pension transfer market
terry-huddart.jpeg
Terry Huddart: Full STP on platforms is a matter of when, not if
PA360: FCA wants watertight documentation on pension transfer advice
  • About Us
  • Contact Us
  • Marketing solutions
  • Terms and conditions
  • Privacy and Cookie policy
  • RSS
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017