The Week Ahead: Will the City have B&B for breakfast?

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The Independent Online

After a flurry of heavyweight announcements on both sides of the Atlantic, the pace eases off this week. Yet that does not mean information-hungry investors will starve. The banks' second-quarter earnings season is drawing to a close with announcements from some big names.

After a flurry of heavyweight announcements on both sides of the Atlantic, the pace eases off this week. Yet that does not mean information-hungry investors will starve. The banks' second-quarter earnings season is drawing to a close with announcements from some big names.

Asian giants HSBC and Standard Chartered were both exposed to Sars but the impact, despite early fears, appears to have been something of a damp squib. Analysts will want confirmation of this but are otherwise predicting an improvement in profits.

Royal Bank of Scotland is also unlikely to provide many surprises. The group, currently focused on its US expansion, has a solid track record that rarely gives investors sleepless nights.

It will be a slightly different story at Barclays and Bradford & Bingley, however. Barclays' shares wobbled in June after it revealed that growth had stagnated in the first quarter, while Bradford & Bingley has already warned that first-half profits will be dented by falling sales of investment products. Investors will therefore want to know how the former building society expects to fare over the coming months.

Other blue chips reporting include mining giant Anglo American, industrial gases group BOC and engineering firm GKN, whose recovery continues to depend heavily on conditions in the global car market. GKN also has an aerospace division, with around 80 per cent of that focused on the military sector, which should help overcome weak civil demand. Overall, however, group interim profits are likely to fall from around £136m last year to £125m this time . The global economic recovery may be gaining momentum but the beleaguered manufacturing and engineering sectors, it would seem, still have a way to go.

Outside the top flight, hotels - another sector battered by the global downturn - will also be in the news. Following Royal Bank of Scotland's decision last week to take management control of the 11 Le Meridien hotels it owns in the UK, the focus this week will be on the other 126 hotels in the chain. US bank Lehman Brothers and rival operator Hyatt remain locked in talks with lenders, finalising details of their proposal to take control of the remaining hotels. All involved have time on their hands - the next debt repayment of around £100m is not due until October - but the deal is expected to be completed before then.

Meanwhile, rumours continue to circulate that another hotel operator, Millennium & Copthorne, could trim its dividend, although that will depend on expectations of when the sector might recover. If the view is taken that business customers could start checking in again as soon as next year, the payout may remain safe - for this set of results at least. Cash conservation is the key, however, particularly as the group is expected to produce a loss of around £7.9m against last year's profit of £25.6m.

From the old world to the new economy. Following recent updates from online bookshop Amazon and internet auctioneer eBay, travel agency ebookers and bucket shop Lastminute.com both put out figures this week. Online travel agents have done remarkably well and are among just a handful of consumer-based internet sites to have taken off. This has not been lost on the City and ebooker's shares have soared this year, moving from 185p in April to last week's push towards 570p. Investors will therefore be hoping for good news at its first-quarter results, although the impact of Sars on the company - it owns an Asia-specialist agency - should not be underestimated.

Lastminute's shares have also performed well recently, although much of this has been down to speculation that a US rival like Expedia or Travelocity. com may be interested in snapping up the UK business. So far it has not made any comment on this, though that could change at Tuesday's third-quarter results.

Other updates include passenger numbers from British Airways and easyJet, while on the economic front, the main news comes from the Bank of England. Its Monetary Policy Committee meets this week to discuss interest rates, announcing the decision on Thursday. Following last month's cut to 3.5 per cent, however, economists believe the cost of borrowing will be left on hold.

Equity markets are also expected to provide little in the way of drama. Following a strong surge at the end of the Gulf war, the FTSE 100 has since seemed happy to trade within the 4,000 to 4,200 range - and as the summer months wear on and corporate news tails off, that tranquillity seems set to endure.

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