Heat is on for Centrica as PM’S speech sends shares to new low

BRITISH GAS owner

Centrica slipped to a fresh 14-year low as analysts started to count the cost of Theresa May’s energy price cap, with Investec telling clients that the writing is on the wall for the sector.

Investec said that the legislation was “a sea change in a long drawn-out saga” and that Centrica would be the most affected within the sector by the proposals, sending the utility giant’s shares sliding 3p to 174.5p to the bottom of the FTSE 100.

The broker’s downgrade from “hold” to “sell” topped off a torrid week for Centrica, with its share price tumbling more than 6pc on Wednesday as the Government stepped up its battle on what the Prime Minister described as “rip-off ” energy prices.

A price cap covering an additional 50pc of the domestic market now seems more likely, analyst Roshan Patel argued, adding that regulation will have “considerable financial and industrial impact”.

Leaving a “buy” stamp on rival SSE, Mr Patel said the medium-term impact on the Scottish company’s earnings was limited by its “relative efficiency” in certain areas. SSE closed just 9p lower at £13.71.

Overall, the FTSE 100 nudged 14.88 points higher to 7,522.87 as the pound’s persistent weakness continued to buoy London’s big exporters.

Elsewhere, platinum producer Lonmin skyrocketed 11.3p to 85.3p after lenders gave the miner the green light to acquire the remaining 50pc stake in the Pandora project by providing covenant waivers.

The pressure on Lonmin has been mounting as it burns through cash in its restructuring efforts and the price of platinum continues to remain suppressed.

RBC Capital Markets analyst Richard Hatch says that the move will “alleviate near-term pressure from the balance sheet”.

While yesterday’s 15pc jump was the miner’s best day of trading since July, the move is nothing compared with the recent plunge in Lonmin’s share price which has fallen from above £40 in 2013 to just 36.9p at its lowest level last year.

Meanwhile, a broker note from UBS warning that BAE

Systems’ US momentum will be offset by a slowdown in its UK business pulled the aerospace giant down 2p to 613p. Although Qatar has provided the company with some relief by signing a “statement of intent” to buy 24 Typhoon jets, the mid-term outlook “will be constrained by limited growth in the UK defence budget and potential continued delay in further sales to Saudi Arabia”, UBS analyst Celine Fornaro said.

Easyjet’s trading update showing that the flood of seats in the airline sector is putting pressure on European carriers pulled down British Airways owner

IAG 3p to 614.5p and no-frills rival Ryanair €0.46 (41p) to €16.51. Easyjet sank towards the bottom of the index despite record passenger numbers over the summer as revenue-perseat, a key indicator of an airline’s health, dipped, sending it sliding 21p to £12.63.

Building materials supplier CRH retreated 36p to £27.74 after a rival entered the race to acquire US peer Ash Grove, while defence specialist Cobham moved 3.7p higher to 147.4p after UBS lifted its price target for the firm from 150p to 163p. Newspaper publisher

Johnston Press nudged up 0.3p to 16p after Christen Ager-hanssen, who heads private equity firm Custos, increased his stake to 12.6pc in his attempt to rescue the i newspaper owner.