The Business Matrix: Monday 7 March 2011

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To raise rates or not to raise?

The Bank of England’s Monetary Policy Committee begins its March meeting on Wednesday and will announce its interest-rate decision on Thursday. Most economists expect rates to stay on hold once again, but an increase is not absolutely out of the question.

Pru’s Asian arm expected to slow

Prudential’s Asian business will attract interest when the insurer reveals annual figures on Wednesday. JPMorgan Cazenove expects slower year-on-year growth at Pru’s Asian division in the final quarter, with India likely to prove a drag on performance.

Recent buy on the agenda for Pace

All eyes will be on Pace’s recent acquisition of 2Wire when the set-top box manufacturer posts its full year numbers tomorrow. As a meter, Collins Steward analysts expect the original guidance of $30m in cost synergies to turn out to be “conservative”.

Home Retail’s high street update

Friday’s trading statement from Home Retail will provide clues about the health of the high street. RBS analysts predict that the Argos business will show trading and margin pressure, while Homebase is expected to see positive sales and strong margins.

Morrisons in focus amid buy-back talk

Analysts are expecting the announcement of a shares buyback scheme when Morrisions stores posts full-year results on Thursday. However, Evolution Securities warned that there was “little room for any major positive surprise in the numbers”.

Antofagasta should show copper boost

Higher commodities prices, particularly for copper, are expected to drive a positive update from the mining group Antofagasta tomorrow, with some analysts eyeing sales of $4.5bn and annual pre-tax profits of nearly $3bn because of the rising.

John Lewis to issue first retail bond

John Lewis Partnership launches its first retail bond this morning in an attempt to raise £50m. The five-year bond will have a fixed annual return rate of 4.5 per cent, plus another 2 per cent paid in gift vouchers. The retailer’s chairman, Charlie Mayfield, said: “The partnership bond issue is in keeping with HM Treasury’s desire to develop non-bank lending channels to help improve macroeconomic resilience in the longer term.”

Global IPOs see strong start to 2011

The international market for company listings began the year in buoyant fashion, with the first two months of 2011 seeing more than $25bn raised in 193 deals, according to Ernst & Young. Britain saw two initial public offerings over the period, with Hydraulic Machines & Systems raising $360m at its debut on the main market of the London Stock Exchange, and Frontier IP raising $2m by floating on the Aim.

Coca-Cola plans recycling plant

The soft drinks group Coca-Cola Enterprises has announced plans to set up Europe’s biggest plastic bottle recycling plant by entering into a joint venture with ECO Plastics. Once it is fully operational, the new plant in north Lincolnshire will double the amount of recycled plastic produced in the UK– from about 35,000 tonnes last year to more than 75,000 tonnes a year.

HSBC ‘has no plans to quit London’

HSBC tried to calm speculation that it is preparing to quit Britain for Hong Kong by saying it had no imminent plans to leave the City of London. Shareholders have increasingly been asking the bank’s management about the cost of remaining headquartered in the UK. The speculation has arisen as the company conducts its triennial review of where best to locate its head office.

Germans lobby for tougher rules

Germany’s main business lobby groups last night called on eurozone countries to adopt tougher rules to strengthen their fiscal discipline. The request came ahead of a summit in Brussels later this week, where leaders of the eurozone nations are expected to discuss proposals to resolve Europe’s sovereign debt crisis.

China puts new focus on inflation

The Chinese economy is set for another five years of strong growth, the country’s Premier, Wen Jiabao, said at the weekend, while reiterating the need to keep a leash on rising prices. “We must ... make it our top priority in macroeconomic control to keep overall price levels stable,” Mr Wen said.

Greece is urged to extend debt terms

Lars Feld, an economic adviser to the German Chancellor, Angela Merkel, has suggested that Greece should talk to private bondholders to extend the repayment period on its debt pile. He told a Greek newspaper that the country, which received an EU/IMF bailout last year, should “actively pursue such a strategy”.

Ireland will stick to its rescue targets

The incoming Irish government plans to stick with the fiscal targets laid out when the country was bailed out by the EU and the IMF. Phil Hogan, one of the lead negotiators for the main Fine Gael political party in the ongoing coalition talks, revealed the news yesterday in an interview with the Irish state broadcaster RTE.