City File: Water companies relatively cheerful

BY CONTRAST the water companies were relatively cheerful, if only because their price structure - and thus their gross profits - has been agreed with their regulator for a couple of years. So the market, knowing that the dividends are safe, is naturally attracted by the appetising yields.

The sub-text is that the market is no longer looking for growth and so is no longer prepared to reward the best managements: hence the weakness of a previous favourite, Wessex, down a few pence on the week to 538p and, by contrast, the relative strength of high yielders such as Severn Trent and Southern. Clearly there is not much growth to look for once the present price structure is revised in 1995.