Domestic utilities have weathered the US government shutdown the best of any sector over the past five days. Utilities are up close 0.95% against an index decline of over 1%.
With international equity markets feeling uneasy about the US government shutdown overnight, utilities are primed to be favoured by investors today. The falling yield on the 10-year US Treasury Note is favourable to the sector, especially in a time when investors are hunting for yield (see Adam Carr's Stay with the yield play).
Utilities were the biggest gainer on the London-based FTSE overnight, adding 1.06% against a loss of 0.35% for the index.
Leighton Holdings (LEI)
Hochtief AG, the major shareholder of Leighton fell over 7% as new information about the poor corporate governance practices at Leighton’s came to light. Corruption at Leighton’s dates back to 2010 and 2011.
In addition to corruption claims, Leighton’s has also previously failed to comply with continuous disclosure rules. In 2012 regulator ASIC slapped Leighton’s with a $300,000 fine for not updating the market over three of its projects.
Investors in Leighton’s will be feeling uneasy with information concerning the corruption back in the headlines.