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
Key Takeaway: Japan's largest banks—MUFG, Sumitomo Mitsui, and Mizuho—have raised profit forecasts to record levels and announced substantial share buyback plans, benefiting from higher domestic interest rates and a strong stock market.
Japan’s leading banks are set for a combined ¥3.7 trillion (US$24 billion) profit this fiscal year, as rising interest rates and gains from share disposals fuel their earnings. Mitsubishi UFJ Financial Group (MUFG) projects ¥1.75 trillion in net income, while Sumitomo Mitsui Financial Group revised its profit target to ¥1.16 trillion and Mizuho Financial Group expects ¥820 billion.
Each bank has unveiled buyback plans, with MUFG targeting ¥300 billion, Sumitomo Mitsui aiming for ¥150 billion, and Mizuho planning its first buyback since 2008, with ¥100 billion worth of shares set for repurchase by March.
Key Figures:
- MUFG: 1.75 trillion yen profit forecast; first-half profit surged 36% to ¥1.3 trillion.
- Sumitomo Mitsui: 1.16 trillion yen profit target; first-half profit up 38% to ¥725.2 billion.
- Mizuho: 820 billion yen profit projection; first-half profit rose 36% to ¥566.1 billion.
The banks are also benefiting from a weaker yen, which enhances the value of overseas earnings. Additionally, Japan's banks continue to unwind cross-shareholdings, boosting profits as they dispose of corporate shares at near-record stock prices.
While US President-elect Donald Trump’s policies are seen as favorable for business, bank leaders caution about potential inflation and trade tensions. Japanese bank stocks have seen significant gains this year, with Mizuho up 46%, MUFG rising 48%, and Sumitomo Mitsui jumping 58%.
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