The Week Ahead: New boys give blue-chip index a Russian flavour
There may be a scarcity of updates during what is the last week before Christmas, but it will be notable for three companies at least. Evraz, Polymetal and CRH are all making their debut on the top-tier index today, so punters will be eager to find out how the new boys adjust to life as a blue-chip stock.
All three groups gaining entry as part of the latest indices reshuffle have done so at the first possible opportunity, having switched their main listings to London over the past few months. The move certainly gives the FTSE 100 a Russian flavour, with the steelmaker Evraz and the gold digger Polymetal the first from the country to be traded on the benchmark index.
Part of the appeal of the move will be the lack of volatility compared to trading in Russia. Polymetal has certainly seen an immediate benefit, with its share price climbing roughly 9 per cent.
Meanwhile, Evraz has stayed steady, although the group, backed by Chelsea owner Roman Abramovich, has already fallen foul of the Footsie rule book – or at least the rule book after it was rewritten last week. The FTSE Group's decision to raise the minimum free float for a company trading on its indices to 25 per cent from 15 per cent means Evraz, with a free float of 24.8 per cent, narrowly falls short, although it has promised to increase the level.
CRH, meanwhile, has edged back since it changed its listing in the City from secondary to primary a fortnight ago. The Irish building materials group wasn't helped on Friday by UBS removing its "buy" recommendation, with the broker saying the rise in its share price before the switch meant there was little potential for further rises ahead.
Aggreko kicks off the week with a pre-close trading update after the temporary power supplier cheered the City by increasing its full-year profit expectations to at least £320m back in October. Peel Hunt is readying itself for another "positive" release, believing the group will say it remains on course to meet forecasts, and the broker is predicting revenues of £1,420m.
However, Peel Hunt's analysts say that – in terms of the future for the share price – much will depend on its comments for next year, considering it normally releases rather detailed guidance. In particular, they will be looking for news on capital expenditure for 2012, forecasting a net fleet investment of £360m.
Also updating the market on Monday will be HMV, the last of the major high-street names expected to comment on trading in the run-up to Christmas. Numis Securities' Andrew Wade expects the weak performance the retailer announced back in September will have continued over the rest of the first half of the year, with the analyst warning it could even end up suffering a pre-tax loss for the full 12 months.
Results/Updates: Aggreko and HMV.
The world's largest cruise company sails into view tomorrow as Carnival releases its fourth-quarter results. The tourist industry has been a rather cloudy place as of late thanks to the well-documented woes of Thomas Cook, yet despite saying she is "cautious" over the sector as a whole, the Share Centre's Sheridan Admans still expects the group to meet expectations.
Back on solid land, Tuesday also sees National Express unveil its pre-close trading statement, and according to UBS the transport group's rail operations will continue to be the best source of growth. The broker believes passenger revenues will have risen as much as 6 per cent, while news on September's acquisition of Petermann Partners for $200m and its integration into the rest of its US school bus business should be forthcoming.
Meanwhile, WSP's pre-close announcement comes at the end of a tough year for the engineer in which it has been hit by cuts to public sector spending. Peel Hunt feels the small-cap group will reiterate that "market conditions generally remain challenging", while investors will be turning their minds to whether any profits growth will be possible 2012.
Results/Updates: Carnival, National Express and WSP.
Results/Updates: No major companies due to report.
Results/Updates: European Goldfields.
Results/Updates: No major companies due to report.
Rightmove house price index.
CBI industrial order expectations; Public sector net borrowing; US building permits; US housing starts.
Bank of England Monetary Policy Committee minutes; US crude oil inventories; US existing home sales.
Current account figures; GDP; US GDP; US unemployment claims.
BBA mortgage approvals; US durable goods orders; US new home sales; US PCE price index; US personal spending; US University of Michigan consumer sentiment.
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