The Week Ahead: BHP Billiton is boosted by oil and gas high

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It's boom time at BHP Billiton and Wednesday's annual results from the mining giant will certainly reflect this. It is benefiting from a combination of record metals prices and a record oil price. Although Billiton is primarily a miner, it has built up its oil exploration assets in recent years: they now account for about one-third of the group's total earnings.

It's boom time at BHP Billiton and Wednesday's annual results from the mining giant will certainly reflect this. It is benefiting from a combination of record metals prices and a record oil price. Although Billiton is primarily a miner, it has built up its oil exploration assets in recent years: they now account for about one-third of the group's total earnings.

It is this mixture that appeals to Williams de Broe. "We continue to favour Billiton as our core holding in the mining sector, particularly with its unique presence in the oil and gas industry," the broker recently told its clients. And this is perfect for the company asthe climb in oil and metals prices looks set to continue.

China's economic growth shows no signs of abating and, as long as this continues, so should the strength in commodity prices. Meanwhile the anxieties that have driven the oil price higher - namely the continued turbulence in the Middle East and the uncertainty surrounding the Russian heavyweight, Yukos - are unlikely to ease in the short term. Analysts forecast that net income at BHP will soar some 60 per cent to about $3.5bn.

TODAY: The outlook statement accompanying interims fromMichael Page will interest City analysts. They already know that the first half of the recruitment group's year has been satisfactory, thanks to its trading statement in July. Dresdner Kleinwort Wasserstein believes Michael Page will be bullish about its future prospects. "It is difficult to see why the company's management will not be very positive about the outlook, given recent comments from peers such as Harvey Nash and Robert Walters," the broker said last week.

Dresdner expects earnings before interest, tax, depreciation and amortisation to rise to £16.8m from £10.6m and it predicts that City forecasts for the group's full year may have to be upgraded. This growth is being achieved thanks to strong trading conditions across the board at the company.

In the car distribution world there was a pleasant surprise for shareholders of Lookers earlier this year when it emerged that the group would receive at least £17.5m from HM Customs & Excise as a reimbursement for overpaid VAT. There should be more good news for investors from Lookers' interims results as Numis tips pre-tax profits before exceptional items to jump to £10m from £9.2m last year.

Lookers has been a very acquisitive player and the broker applauds its recent £31m purchase of FPS Distribution. The deal not only adds to the company's revenue stream but it makes the group less cyclical in nature by reducing its dependence on new car sales.

Results: Full year - None. Interims - Lookers; Michael Page; Systems Union.

TOMORROW: Results: Full year - Berkeley Morgan. Interims - Angle; Turbo Genset.

WEDNESDAY: After two years of reporting losses, brokers expect first-half figures from Financial Objects to show that the software group is moving towards a break-even position. If this proves to be the case it will be thanks to the cost-cutting measures undertaken by management. Revenues are forecast to remain broadly flat at £4.7m for the half. It is difficult to predict what FO's management will say about the outlook for the company. Comments from its rivals have been mixed of late. While Misys has continued to complain about challenging markets, Temenos has been more optimistic.

Results: Full year - BHP Billiton. Interims - BPP Holdings; Financial Objects; IQE.

THURSDAY: Results: Full year - None. Interims - Aricom; Edinburgh Oil & Gas.

FRIDAY: Is WPP about to buy America's Grey Global? That is the most important question to those following the advertising giant. They are bound to quiz its chief executive, Sir Martin Sorrell, on the topic when he unveils the company's first-half figures. Grey Global put itself up for sale in June and since then WPP shares have underperformed its rival Publicis by just 2 per cent. This suggests that the market does not believe there is any danger that Sir Martin will launch an overpriced bid for the company.

Trading conditions for WPP have been improving but the company's fortunes are tied to the state of the US economy. For some time now Sir Martin has been concerned about how it will perform in 2005 and this is unlikely to have changed given the latest data out of the US.

In terms of the pure financial at the advertising giant, pre-tax profits will have risen to about £225m from £197m. Shareholders can expect the company to raise its dividend 20 per cent, something it has managed to achieve at each interim stage this decade.

Results: Full year - None. Interims - T Clarke; Quarto; WPP.

Economics Diary

TODAY: Germany - Producer prices (Jul). US - New York Fed survey (Aug), Empire manufacturing (Aug).

TOMORROW: Rics housing market survey (July). Eurozone - Industrial production (Jun). Germany - ZEW survey (Aug). US - CPI (Jul), housing starts (Jul), Industrial production (Jul).

WEDNESDAY: UK - MPC minutes (Jul). Eurozone, HICP (Jul), trade balance (Jun).

THURSDAY: Retail sales (Jul), M4 money supply (Jul), M4 lending (Jul), PSNCR (Jul). US - Philadelphia Fed survey (Aug), leading indicators (Jul). FRIDAY: Eurozone - current account. France - GDP (Q2). Japan - All industry activity index (Jun).

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