(Reuters) – British water utility stocks dropped on Thursday on prospects of tougher regulation and even nationalisation of the country’s biggest supplier, Thames Water, as it struggles with huge debt.
Shares in Severn Trent, United Utilities and Pennon fell more than 2% in morning trading.
The government has held emergency talks in recent days over the fate of the heavily indebted Thames Water, with the government ready to place the company in temporary state ownership if it fails to secure funds from shareholders.
“The prospect of political and public pressure for a tougher regulator regime could be weighing on the share price,” said Russ Mould, analyst at AJ Bell
“Any nationalisation (even if temporary) and then resale (depending on government policy and indeed the identity of the party in power) could have implications for quoted stocks.”
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Vinay Dwivedi)
