Energy prices in focus on Wednesday as SSE Plc updates investors

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The update from SSE PLC (LSE:SSE) won’t be short of talking points – from energy market volatility, regulations and activist shareholders.


Back in September, the utility firm was forced to dismiss speculation that it could be broken up, amidst pressure as activist hedge fund Elliott Management built up a stake. Billionaire Paul Singer’s outfit had held meets with representatives from SSE, as well as some of its major shareholders.


The FTSE 100 energy group in September guided that it would update investors in the half-year result, promising details of higher investment for the period to 2026, sources of funding and the company’s vision for further growth into the 2030s including renewable and flexible capacity.


On the regulatory front, late last month, SSE expressed disappointment over the UK’s competition watchdog’s final verdict in their appeal against a new price regime.


The CMA did not uphold its appeals “on the flawed Cost of Equity, or on changes to how Transmission Network Use of System Charges are recovered and the associated risk of under-recovery this presents.”


Financials and dividends will of course be in focus, even if much of the commentary will be looking at the bigger picture.


CMC Markets to issue interims


Management got some big news out of the way early, on Monday revealing its mulling a separation of its leveraged (providing CFD trading) and non-CFD investment businesses, ahead of Wednesday’s interim results.


As far as the financials are concerned, the company is expected


Wednesday will also be the turn of CMC Markets PLC (LSE:CMCX)‘s interims, where revenue is expected to come in at GBP126mln.


“With continuing investment being made in the business, half-year profits are likely to be materially lower than the exceptional period in the first half of last year. We view the investments being made as exciting for the future potential of the group,” analysts at Peel Hunt commented.


“Part of the plans are building a retail investment platform in the UK, utilizing many of the core strengths of the existing business (trading and risk management being two).”


All eyeballs on inflation stats


Eyeballs are sharply focussed on Wednesday’s economic stats, and, with inflation seemingly lurking around every statistical corner the narrative is building towards a December interest rate rise at the Bank of England.


Whether or not the Bank of England actually opts for a rate rise will be a matter of continued speculation for the weeks to come – and indeed, the last meeting minutes showed policy makers were very recently leaning stubbornly against a hike (with seven votes against two keeping the central bankers sat on their hands).


Tuesday brought “better than expected” employment data, against a backdrop that included yet more headlines about a further increase in wholesale gas prices, with the price for December delivery to the UK up 9%.


Only yesterday, the Bank of England governor Andrew Bailey described himself as “uneasy” about rising inflation and that was before Tuesday’s employment numbers further food for thought.


“The governor of the Bank of England Andrew Bailey says he’s uneasy about rising inflation and the jobs figures are another indicator that there could be a fresh sugar rush of higher wages.


“Already starting salaries this Autumn are at their highest rate in 24 years but Mr Bailey still appears steadfast in this view that sweeteners for staff will be temporary and that we won’t be returning to the wage spiral of the 1970s.


“But the layers are building up for a sustained increase in prices in the medium term. The supply chain crisis has already spread across the globe, pushing up costs for companies and shows little sign of easing just yet. The pandemic bounce back has buttered up demand for goods, and now potential has grown for higher wages to congeal”.


There’s a similar story playing out in America, though over there retail sales data will this afternoon provide economists with their next steer.


Wednesday 17 November


Finals: Sage group Plc


Interims: British Land Company PLC (LSE:BLND), CMC Markets PLC (LSE:CMCX), Experian (LSE:EXPN) Plc, Speedy Hire PLC (LSE:SDY), SSE PLC (LSE:SSE), Tatton Asset Management PLC (AIM:TAM), Workspace Group PLC (LSE:WKP)


Trading announcements: Safestore Holdings (LSE:SAFE) Plc


AGMs: Amte Power Plc, Berkely Energie Ltd, BMO real estate investments Ltd, Celtic Plc, Henderson Eurotrust Plc, Ncondezi Energy Ltd (AIM:NCCL), Pacific Horizon Investment Trust (LSE:PHI) Plc, Picton property income Ltd, Rainbow Rare Earths Ltd


Economic data: Producer Price Index (UK), Retail Price Index (UK), Consumer Price Index (UK), MBA Mortgage Applications (US), Building Permits (US), Housing Starts (US), Retail Sales (US), Crude Oil Inventories (US).

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