LIVE MARKETS-German election: a new positive catalyst for utilities

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GERMAN ELECTION: A NEW POSITIVE CATALYST FOR UTILITIES

A likely grand coalition between the CDU/CSU and SPD in Germany should become a new positive catalyst for the country's utilities stocks, Barclays says, supporting their overweight ratings on E.ON and RWE.

"In addition to a potentially more business-friendly platform, we believe investors would likely expect a Conservative-led government to pursue a more utility-friendly energy policy," Barclays writes in a note.

German industry has suffered since the start of the war in Ukraine given its reliance on low-cost Russian gas, while the economy has shrunk for the last two years.

Barclays believes one of the main areas of focus for the new government could be to address critical issues related to energy policy.

"This is particularly relevant for more flexible generation needs and continued significant investment into networks that might lead to a more favourable energy policy that benefits E.ON and RWE," Barclays says.

(Samuel Indyk)

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