WATER companies on the London Stock Exchange are being shorted by one of the world's largest pension schemes, according to data from the Financial Conduct Authority (FCA).

The watchdog revealed that the Canada Pension Plan Investment Board (CPPI) - worth £336bn - has accrued hefty bets against Severn Trent and United Utilities.

CPPI is currently the only investor with an outstanding short against United Utilities sufficient in size to require disclosure to the City regulator, and is one of only two funds that have bets disclosed against Severn Trent.

The UK's water industry has faced severe scrutiny over its financial health after Thames Water scrambled for funds following a boardroom exodus, with the supplier buckling under the weight of £14bn of debts.

Severn Trent shares have fallen 15 per cent since the start of May following the crisis, while United Utilities' shares are down 10 per cent over the same period.

(c) 2023 City A.M., source Newspaper