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Southern Water Downgraded to Junk by Moody’s Amid Water Industry Challenges

Key Takeaway: Moody's downgraded Southern Water to junk status , citing financial and operational underperformance, compounding the broader issues facing the UK water sector. Southern Water Ltd’s credit rating was downgraded to junk by Moody’s , with a warning of potential further cuts due to its weak performance history and financial challenges. This downgrade impacts the company’s ability to raise the £4 billion in new debt and £650 million in equity required for its capital plans. The UK water industry is facing heightened scrutiny due to concerns over chronic leaks, sewage spills, and high-interest rates. Southern Water, which supplies over two million people in England, could face severe penalties from the regulator Ofwat , which may limit funds for essential upgrades. Following the downgrade, Southern Water’s 2026 bonds dropped 2.7 pence to around 85 pence on the pound. Despite the rating cut, Southern Water assured customers that services would continue unaffected, hig
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Foxconn Projects Strong AI Server Growth, Adjusts EV Goals Amid Trade Tensions

Key Takeaway: Foxconn anticipates robust demand for AI servers in 2024, bolstering sales growth, while delaying its electric vehicle (EV) market target due to slowing demand.

Foxconn, the world’s largest contract electronics maker, forecasts significant sales growth in AI servers for 2024, projecting that AI servers will make up 50% of its total server revenue next year. This optimism comes as the company diversifies production amid US-China trade tensions and potential new tariffs under President-elect Trump. Foxconn is expanding operations in India, the US, Mexico, and Vietnam to mitigate risks associated with its China-based facilities.

Highlights:

  • AI Demand Surge: Foxconn, a key supplier to Nvidia, expects to capture at least 40% of the global AI server market. The company is building a large Mexico facility to bundle Nvidia’s advanced GB200 superchips.
  • Record Sales: October marked Foxconn’s highest sales for the month, and the company projects year-on-year revenue growth for the fourth quarter.
  • Delayed EV Goals: Facing weaker EV demand, Foxconn postponed its goal of reaching a 5% share in the global EV market by 2025. The company is exploring partnerships with two Japanese automakers to strengthen its EV presence.

Foxconn’s fifth consecutive quarter of profit growth saw net profit of T$49.3 billion, surpassing estimates, as AI server sales offset a slowdown in consumer electronics. Foxconn’s shares have doubled in 2024, fueled by its strategic pivot toward AI and cloud infrastructure.

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