3 FTSE stocks in focus as Ofgem director resigns over energy price cap

Be the First to Comment Read

3 FTSE stocks in focus as Ofgem director resigns over energy price cap

 3 FTSE stocks in focus as Ofgem director resigns over energy price cap
Image source: ART STOCK CREATIVE, Shutterstock.com

Highlights:

  • A director of UK's energy regulator Ofgem has stepped down after the body gave the nod to new changes in the energy price cap.
  • The changes are expected to hike the energy suppliers' profits but would put more burden on consumers.

Energy bills have hit record highs and are projected to rise further in October, putting a huge squeeze on the pockets of millions of Brits. Due to this, the country's energy regulator Ofgem has faced severe criticism as it has failed to ease the bills and support people when they are already hit by high inflation. Citing this failure, a director of Ofgem has quit, saying that the regular couldn't maintain a balance between the interests of consumers and suppliers.

Christine Farnish, a non-executive member of Ofgem's board, tendered her resignation to business secretary Kwasi Kwarteng in early August over the changes in the energy price cap. She claimed the regulator provided too much benefit to energy suppliers at the expense of consumers, allowing them to pile up additional costs onto customers.

Energy bills have skyrocketed in the UK

Image source: © Coffeekai | Megapixl.com

She also accused the watchdog of favouring the suppliers with a rule change that would add £400 to the average UK household energy bill. The new rule will allow suppliers to recoup certain wholesale costs during the winter instead of spreading them throughout the year. The regulator has claimed the move will prevent more energy suppliers from going bust. However, it is expected to add significant pressure on consumers' budgets.

The resignation comes at a time when the energy price cap is set to be revised again from October, taking it to an expected £3,523 annually in October from the current £1,971. 

In the wake of this news, investors can take a look at the below stocks selected by Kalkine Media®.

Centrica Plc (LON: CNA)

The energy services and solutions company posted an adjusted EBITDA of £1,660 million in the first six months of 2022, significantly higher than the £682 million it posted in H12021. Similarly, the adjusted operating profit climbed to £1,342 million in the first half of 2022 from £262 million during the same period last year. At present, the firm holds a market cap of £4,827.70 million, and its 52-week return stands at 61.74%, while the YTD return is 14.29%.

SSE Plc (LON: SSE)

SSE is another multinational energy utility company and a constituent of the FTSE 100 index. It has a market cap of £19,565.38 million, and the earnings per share stand at 2.87. Over the past year, the stock has provided a return of 12.92% to investors, while its Relative Strength Indicator (RSI) stands at 32.94 as of 1:24 pm GMT+1 on 18 August. 

ContourGlobal Plc (LON: GLO)

The power generation business operates in 20 countries across the world. With a market capitalisation of £1,688.08 million, the stock is listed on the midcap-focused FTSE 250 index. It has gained 28% over the past one year and 33.75% on a year-to-date basis. The RSI currently stands at 39.32.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Disclaimer

Speak your Mind

Featured Articles