MARKET TALK: VAT Hike Good For UK Water, Energy - Deutsche

23rd Jun 2010 07:19

0619 GMT [Dow Jones] The VAT increase announced by the UK Chancellor will benefit UK water and energy networks, says Deutsche Bank. Says the increase will be a benefit for the regulated networks since it will feed through to inflation via the retail price index. Says the government's revised RPI forecasts look extremely attractive and would imply asset base and earnings growth for the UK water and energy networks in excess of what is currently reflected in share prices or consensus estimates. Notes though RPI inflation benefits may be slightly offset by reductions in capital allowances for investment in plant and machinery. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires June 23, 2010 02:19 ET (06:19 GMT)