SOME OF the UK's largest water companies have seen a bounce in their share price, with investor sentiment warming towards the troubled industry.

Three of the country's publicly listed suppliers enjoyed a robust trading session yesterday, with Pennon (up 3.18 per cent), Severn Trent (up 2.82 per cent) and United Utilities (up 1.92 per cent), all rising on the London Stock Exchange.

share on the FTSE 100 ahead of markets opening today, with United Utilities priced at 1,019p per share on the same index, and Pennon trading at 682p per share on the FTSE 250.

This comes as investment analyst Jefferies upgraded its stance for the water sector to 'buy' - praising the business plans of the three companies.

These are the strategies the companies have to submit to regulator Ofwat to outline its spending over the next five years, and how it hopes to raise revenues to meet turnaround plans to fix leaking pipelines, creaking infrastructure and help towards getting more customers.

Jefferies argues that the plans present an "unprecedented opportunity for multi-year growth" in a note presented ahead of trading this morning.

It argues that Severn Trent's recent £1bn equity raise has "bolstered their balance sheet" significantly, raising expectations it will deliver its business plans for the upcoming pricing window.

The bullish investor forecast is a rare good news story for the beleaguered industry, with Big Nine suppliers creaking under a £54bn debt mountain; with Thames Water top of the pile holding fully £14bn in debts.

(c) 2023 City A.M., source Newspaper