National Grid sells 20pc of National Gas assets, Severn Trent trades in line

London open

The FTSE 100 is expected to open 54 points higher on Wednesday, having closed up 0.64% on Tuesday at 7,453.69.

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National Grid has sold a further 20% of its UK National Gas transmission and metering business to the existing majority owners, a consortium of investors led by Macquarie Asset Management, along with an option to buy the rest of the company. National Grid said it intended to use total proceeds of £700m towards general corporate purposes including repayment of debt. The consortium has the option, exercisable between 1 May 2024 and 31 July 2024, to buy all or part of the remaining 20%.

Severn Trent said in an update on Wednesday that its financial performance is on track, and that it anticipated meeting current expectations, including a customer net reward of at least £50m. The FTSE 100 water utility said it had locked in 45% of its net energy exposure for the 2024-2025 period at lower rates, providing protection against price volatility. It added that it was efficiently managing its investment programme, with capital expenditure expected to be between £850m and £1bn this year in preparation for the AMP8 regulatory period.

Newspaper round-up

The owner of carmaker Jaguar Land Rover (JLR) is expected to announce that it will build an electric car battery gigafactory in the UK, backed with £500m in government funding, in what would be a major boost for the British car industry. Indian conglomerate Tata Group, which owns Jaguar Land Rover, has been locked in negotiations for months to secure state aid for the project, which would aim to produce 40 gigawatt hours (GWh) of batteries a year, enough to power hundreds of thousands of electric cars. – Guardian

Mark Zuckerberg’s Meta is making a commercial version of its artificial intelligence model freely available, in a move that gives startups and other businesses a low-cost opportunity compete with OpenAI’s ChatGPT and Google’s Bard. A new version of a Meta large language model (LLM), called Llama 2, will be distributed by Microsoft through its Azure cloud service and will run on the Windows operating system, Meta said in a blogpost, referring to Microsoft as “our preferred partner” for the release. LLMs underpin generative AI products like the ChatGPT chatbot, although ChatGPT’s owner has not open-sourced – or made widely available to others – its LLM, called GPT-4. – Guardian

One of Asia’s richest families has entered the race for lucrative contracts to transport electricity from Britain’s biggest offshore wind farm back to the National Grid. UK Power Networks Services, which is owned by Hong Kong billionaire Li Cashing’s family, is part of a consortium bidding for control of offshore wind cable networks that are worth £2bn overall. – Telegraph

The Bank of England paid out £25m in bonuses to staff over the past year despite warnings from its governor that employers should show “restraint” over wage rises amid soaring inflation. Thread needle Street confirmed that 429 officials received annual bonuses of more than £10,000 each this year, with some receiving as much as £22,500 each. – Telegraph

Japan’s SoftBank is to invest about $65 million in Tractable, a British artificial intelligence start-up, marking the first major cash injection into a European company from its flagship Vision Fund 2 in more than a year. Tractable develops AI tools that allow insurance companies to assess the state of damage to homes and cars using nothing but digital images. – The Times

US close

Equities surged on Wall Street on Tuesday, propelling the three major stock indices to levels not seen for 15 months as investors digested some key bank earnings.

At the close, the Dow Jones Industrial Average was up 1.06% at 34,951.93 points, while the S&P 500 gained 0.71% to end the day at 4,554.98.

The tech-centric Nasdaq Composite joined its peers in marking new records, posting a gain of 0.76% to settle at 14,353.64.

In currency markets, the dollar was last down 0.04% on sterling to trade at 76.68p, while it slipped 0.03% against the common currency to 89.03 euro cents.

The greenback also decreased marginally against the yen, last losing 0.01% to change hands at JPY 138.82.