City File: Prospects dim for power companies

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The Independent Online
AFTER the most turbulent week in politics since the election,the market is slowly coming to terms with the idea that the privatised utilities are now in the firing line.

They are destined to be bulwarks against excessive inflationary pressures, and the electricity industry is going to bear the brunt of the costs involved in keeping previously doomed pits open.

Hence a slight drop, bang against the market trend, in the prices of the privatised electricity generators and distributors. But this may well not have gone far enough. Markets traditionally hate uncertainties and 'political' stocks. And, as one analyst put it, 'a government which is struggling to survive is going to flail out in all directions'. As a result the position is so insecure that one leading analyst will not provide figures or even discuss the subject. Steer clear.

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