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National Grid - Ofgem's Sector Specific Consultation

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idpickering
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National Grid - Ofgem's Sector Specific Consultation

#187592

Postby idpickering » December 18th, 2018, 8:02 am

Ofgem has today published sector specific consultation documents for our UK transmission businesses as part of the ongoing RIIO 2 regulatory process. The detailed consultation covers a wide range of topics including the cost of capital, incentives, outputs and other financial parameters.

We welcome Ofgem's continued commitment to the key principles of RIIO-T1 of incentives, innovation and output based regulation. The consultation is a very detailed document which we will need to work through; however we are disappointed with the proposed financial package, in particular the cost of equity range as we do not believe it appropriately reflects the level of risk borne by transmission networks. In order to deliver the major capital programme required across our networks in a rapidly changing energy market, we need to ensure the regulatory framework also provides for fair returns to shareholders and enables us to continue to deliver world class networks for consumers.

We will provide a detailed response to the consultation in early 2019. This consultation is expected to conclude in the second quarter of 2019 with the RIIO 2 price control commencing in April 2021.

https://www.investegate.co.uk/national- ... 07277948K/

monabri
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Re: National Grid - Ofgem's Sector Specific Consultation

#187604

Postby monabri » December 18th, 2018, 8:47 am

I'm not liking the sound of this.

Is this analogous to the service and construction sectors where the contracts are "low margin"....?

idpickering
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Re: National Grid - Ofgem's Sector Specific Consultation

#187607

Postby idpickering » December 18th, 2018, 9:04 am

National Grid are down 3.7% as I type, in a downwards market. Anyone tempted? Not me tbh.

Ian.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187748

Postby monabri » December 18th, 2018, 3:56 pm

idpickering wrote:National Grid are down 3.7% as I type, in a downwards market. Anyone tempted? Not me tbh.

Ian.


Or even at 8.6% lower?

idpickering
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Re: National Grid - Ofgem's Sector Specific Consultation

#187753

Postby idpickering » December 18th, 2018, 4:09 pm

monabri wrote:
idpickering wrote:National Grid are down 3.7% as I type, in a downwards market. Anyone tempted? Not me tbh.

Ian.


Or even at 8.6% lower?


Very surprising I must admit. Down 8.9% as I type!. Over the top IMHO. I'm beginning to wonder if the market is beginning to think a Corbyn Government is likely. :o

Ian.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187761

Postby IanTHughes » December 18th, 2018, 4:25 pm

idpickering wrote:
monabri wrote:
idpickering wrote:National Grid are down 3.7% as I type, in a downwards market. Anyone tempted? Not me tbh..

Or even at 8.6% lower?

Very surprising I must admit. Down 8.9% as I type!. Over the top IMHO. I'm beginning to wonder if the market is beginning to think a Corbyn Government is likely. :o

I suspect that it is something more immediate that is causing the worry

https://www.bbc.co.uk/news/business-46602230

Energy regulator Ofgem is proposing to cut consumers' bills by £45 a year from 2021, largely by reducing the rate of returns to investors.

Ian

idpickering
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Re: National Grid - Ofgem's Sector Specific Consultation

#187764

Postby idpickering » December 18th, 2018, 4:34 pm

IanTHughes wrote:
idpickering wrote:
monabri wrote:Or even at 8.6% lower?

Very surprising I must admit. Down 8.9% as I type!. Over the top IMHO. I'm beginning to wonder if the market is beginning to think a Corbyn Government is likely. :o

I suspect that it is something more immediate that is causing the worry

https://www.bbc.co.uk/news/business-46602230

Energy regulator Ofgem is proposing to cut consumers' bills by £45 a year from 2021, largely by reducing the rate of returns to investors.

Ian


Thanks for that Ian. My Corbyn comment was a bit tongue in cheek, but you may well be right.

Ian.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187773

Postby jackdaww » December 18th, 2018, 4:48 pm

down 9% at close.

i have avoided them for reasons of -- debt , pensions , regulation and politics .

Dod101
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Re: National Grid - Ofgem's Sector Specific Consultation

#187794

Postby Dod101 » December 18th, 2018, 5:14 pm

I should have sold them when I sold SSE but they also have business in the US which cannot be affected by Ofgem. I assume that as usual the drop is more than is really justified but who knows? The market is very nervous at the moment and anything seems capable of knocking share prices back.

Dod

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Re: National Grid - Ofgem's Sector Specific Consultation

#187808

Postby Bouleversee » December 18th, 2018, 5:53 pm

IanTHughes wrote:
idpickering wrote:
monabri wrote:Or even at 8.6% lower?

Very surprising I must admit. Down 8.9% as I type!. Over the top IMHO. I'm beginning to wonder if the market is beginning to think a Corbyn Government is likely. :o

I suspect that it is something more immediate that is causing the worry

https://www.bbc.co.uk/news/business-46602230

Energy regulator Ofgem is proposing to cut consumers' bills by £45 a year from 2021, largely by reducing the rate of returns to investors.

Ian


I wonder what The Motley Fool will have to say about that. They have been plugging NG as a retirement share for a long time.

Never mind the market. I'm beginning to think a Corbyn govt. is quite likely myself.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187819

Postby Wizard » December 18th, 2018, 6:24 pm

Bouleversee wrote:I wonder what The Motley Fool will have to say about that...

Why? Will it influence you in any way?

Terry.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187831

Postby Bouleversee » December 18th, 2018, 7:00 pm

Wizard wrote:
Bouleversee wrote:I wonder what The Motley Fool will have to say about that...

Why? Will it influence you in any way?

Terry.


Absolutely not. Just curious. I was never convinced by their "5 shares to retire on".

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Re: National Grid - Ofgem's Sector Specific Consultation

#187857

Postby SlickMongoose » December 18th, 2018, 8:10 pm

Is this expected to affect wholesale suppliers like TRIG?

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Re: National Grid - Ofgem's Sector Specific Consultation

#187864

Postby Walrus » December 18th, 2018, 8:38 pm

Well this has hurt me. A 10 percent drop in a stalwart in a day is not to be sniffed at. I know it's a portfolio but that is pretty grim. Hindsight or not I actually may start investing new monies into passives. I'm still in the building phase and genuinely If my portfolio was three times the size, that kind of daily loss is pretty eye watering

Itsallaguess
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Re: National Grid - Ofgem's Sector Specific Consultation

#187870

Postby Itsallaguess » December 18th, 2018, 8:48 pm

Walrus wrote:
Well this has hurt me. A 10 percent drop in a stalwart in a day is not to be sniffed at. I know it's a portfolio but that is pretty grim. Hindsight or not I actually may start investing new monies into passives. I'm still in the building phase and genuinely If my portfolio was three times the size, that kind of daily loss is pretty eye watering


That seems to suggest that either you're not very well diversified yet, in terms of the number of holdings you've got, or that National Grid has been a fairly large holding for you compared to the rest of your portfolio - or it could mean that both of these situations apply...

If we take a HYP with 20 equally-weighted holdings, and one of those components loses 10% in a day whilst the other 19 components stay the same, then the overall portfolio loss is just -0.5% (minus half a percent).......

Cheers,

Itsallaguess

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Re: National Grid - Ofgem's Sector Specific Consultation

#187871

Postby Walrus » December 18th, 2018, 8:53 pm

Itsallaguess wrote:
Walrus wrote:
Well this has hurt me. A 10 percent drop in a stalwart in a day is not to be sniffed at. I know it's a portfolio but that is pretty grim. Hindsight or not I actually may start investing new monies into passives. I'm still in the building phase and genuinely If my portfolio was three times the size, that kind of daily loss is pretty eye watering


That seems to suggest that either you're not very well diversified yet, in terms of the number of holdings you've got, or that National Grid has been a fairly large holding for you compared to the rest of your portfolio - or it could mean that both of these situations apply...

If we take a HYP with 20 equally-weighted holdings, and one of those components loses 10% in a day whilst the other 19 components stay the same, then the overall portfolio loss is just -0.5% (minus half a percent).......

Cheers,

Itsallaguess


Yes it's a strong hold from me. The loss is about 1 percent of the portfolio, but the size of the red number next to the one name has thrown me a bit.

I think it is more that I didn't see it as a racy holding. losing 10 percent in a single day on one share has surprised me.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187880

Postby monabri » December 18th, 2018, 9:50 pm

Let's see what tomorrow brings.

idpickering
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Re: National Grid - Ofgem's Sector Specific Consultation

#187906

Postby idpickering » December 19th, 2018, 5:56 am

Walrus wrote:Well this has hurt me. A 10 percent drop in a stalwart in a day is not to be sniffed at. I know it's a portfolio but that is pretty grim. Hindsight or not I actually may start investing new monies into passives. I'm still in the building phase and genuinely If my portfolio was three times the size, that kind of daily loss is pretty eye watering


For me, this downward trend is a buying opportunity, certainly not a selling one. As for NG. dropping 9% in one day, I'm relaxed about it, although obviously not nice, they are only one of thirty two holdings in my HYP. I would consider topping up my NG. holdings right now.

Ian.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187907

Postby flyer61 » December 19th, 2018, 6:26 am

Johnson and Johnson dropped 10 per cent in a single day this week.....and now National Grid 9 per cent in a day.

Together they represent 4 per cent of my main retirement fund. As long as the dividend stream continues I’ll take it on the chin.

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Re: National Grid - Ofgem's Sector Specific Consultation

#187914

Postby Dod101 » December 19th, 2018, 7:36 am

I sympathise with Walrus on this one. Being stoic like Itsallaguess and others is fine and it certainly will not hurt me that much but all the same a 10% drop in one day from a stalwart is not good news. It indicates that the UK market is fragile at the moment and any excuse will knock it back. We are getting used to this though and further volatility can be expected in the coming months as Brexit (or not) works its way to some sort of conclusion, or at least direction.

Dod


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