The week ahead: There may be no FCUK in FTSE but the banks are in the money

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The Independent Online

As the festive season gets under way, corporate results start to thin out. But this week at least, there is still plenty to keep City dwellers at their desks.

As the festive season gets under way, corporate results start to thin out. But this week at least, there is still plenty to keep City dwellers at their desks.

The banking sector continues its run in the spotlight with more updates for investors. The City has already heard from Barclays, Northern Rock and Bradford & Bingley, and this week HSBC, Standard Chartered and Royal Bank of Scotland take centre stage.

These updates tend to focus on trends rather than numbers. So at HSBC and Standard Chartered, which both have extensive interests in the Far East, the focus will mainly be on market conditions in the region.

HSBC's chief executive, Stephen Green, will also discuss how the UK high street is faring. Analysts are predicting confirmation that the market is competitive but that demand for credit will continue to drive profitability.

At Royal Bank of Scotland, analysts are expecting a generally positive tone as well as further news on the integration of Charter One, the US bank snapped up earlier this year for $10.5bn (£5.4bn). Many will also be looking for comment on RBS's plans to dispose of its remaining stake in Banco Santander Central Hispano, the recent buyer of Abbey National.

On top of all this, the Bank of England will be in the news when it announces its latest decision on interest rates. Few are predicting any change so close to Christmas, however. Philip Shaw, economist at Investec, says a "hold" is ingrained in market thinking, so any change would be a shock for investors.

Elsewhere, and the FTSE announces it latest quarterly reshuffle. The final decision will be based on Tuesday's closing prices but, going by Friday's close, engineering group Tomkins, which has been hit by rising raw material prices and sluggish demand, is set to fall out of the top flight, to be replaced by sugar and starch specialist Tate & Lyle. It is a key shake-up for investors as many fund managers buy or sell a company's shares purely on the basis of its inclusion (or otherwise) in the FTSE 100.

There has also been speculation that retailer French Connection, which recently warned on profits, could be a candidate for demotion out of the wider FTSE 350 index. Once confirmed, the changes will be effective from 20 December.

Following last week's review by the water regulator Ofwat, the utilities Kelda and Pennon are both scheduled to release results. They are unlikely to provide much detail about the impact of the review, so soon after its publication, although analysts will be looking for comment on the broader implications.

At Kelda, interim pre-tax profits are expected to nudge up, but only marginally, despite the strong performance of Yorkshire Water, as the weak dollar continues to dent its US water services business, Aquarion.

At Pennon, the focus will be on its strongly performing services business, Viridor Waste, although again a general reaction to the new price controls for its regulated business will be expected.

Other companies to look out for include the media group Trinity Mirror, which provides an update on trading. Most analysts are looking for sales growth of around 4 per cent across its regional newspapers and 3 per cent at the national titles, which include the Daily Mirror, and the City will want to hear that the group remains on track to reach these targets. An update on chief executive Sly Bailey's cost-cutting programme will be sought.

Bus and train business Stagecoach is also reporting. An update in October noted that trading was in line with expectations, but pre-tax profits are expected to dip because of a recently announced return of capital and the more onerous re-negotiated franchise terms for South West Trains.

And, as is to be expected at this time of year, retail is never too far away. Photography specialist Jessops unveils its first set of numbers since floating at the end of October, and Clinton Cards shareholders get to rubber-stamp the chain's £46.4m takeover of rival Birthdays at an extraordinary general meeting tomorrow.

Away from equities, and the other point of interest is to be found in Vienna, where the oil cartel Opec meets to discuss production quotas. Oil prices have soared and dipped in recent months, but few are expecting any change to the status quo: Opec president Purnomo Yusgiantoro hinted recently that the members wanted to await developments over the winter before taking any action.

CALENDAR

Tomorrow 6

UK: Results: (final) Aberdeen Asset Management; (interim) Acal, Carclo, Goldshield, Lawrence, Northgate Information Solutions, Samuel Heath & Sons, SCI Entertainment.

Tuesday 7

UK: Results: (F) Centurion Electronics, Character, Dewhurst, Future Network, Grainger Trust, ITE, Landround, Ultraframe, Victrex; (I) Alba, Anite, Christian Salvesen, E2V Technologies, Focus Solutions, Halma, Northumbrian Water, PayPoint, PHS, Protherics, Quintain Estates.

Wednesday 8

UK: Results: (F) ATH Resources, Gooch & Housego, Jessops, Medisys, Numis; (I) DS Smith, Glotel, Helphire, International Greetings, Kelda, Phoenix IT, Stagecoach.

Thursday 9

UK: Results: .(F) Deltron Electronics; (I) AEA Technology, Berkeley Group, Bristol Water, Computerland UK, Dyson Group, Greene King, IP Live, Pennon; (third quarter) Premier Farnell.

Friday 10

UK: Results: none scheduled.

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