London Market: Asia could drag down profits
Sunday 09 August 1998
Recent earnings have shown that companies involved in Asia have had their profits sliced. Sliding currencies are likely to result in a flood of cheap imports, crippling British manufacturers, who will have to drop prices to compete.
"People will still be cautious about companies with Asian exposure and those with increased competition from Asia," said Tony Zucker, director of Friends Provident, citing steel, chemical and paper companies and engineers.
The benchmark FT-SE 100 index declined 2.7 per cent last week to 5680.4, sliding four days out of five.
Telephone companies were the biggest losers on the concern that their recent surge was not justified by earnings. The FT-SE telecommunications index dropped 5.3 per cent. Orange, the mobile phone company, is likely to limit losses this week as it is expected to say first-half loss narrowed. Its shares have almost tripled since the beginning of the year, mirroring the gains in the FT-SE telecommunications index, which has climbed 75 per cent.
Mr Zucker said he favours telephone companies as "penetration rates have exceeded all expectations and will continue to do so". He added: "There's huge growth still there."
Drug companies could be active this week as Nycomed Amersham, Smith & Nephew and Shire Pharmaceuticals Group release first-half earnings on Tuesday.
UK bonds are expected to be little changed as investors wait for the Bank of England's quarterly inflation report and May wage figures to help weigh chances that interest rates have peaked.
"Gilts will do little before the inflation report on Wednesday", said Philip Uglow, an economist at Sakura Bank. The central bank "is likely to say the economy is on track to meet its inflation target, but won't signal rates are at their peak'. Still, he added: "Gilt markets will be relatively satisfied by a modest slowing in wages growth."
The wages and inflation reports are likely to overshadow the producer price report and a retail sales survey. "Depending on what the inflation and wages report say, gilts may rally," Mr Uglow said.
Last week the yield on the benchmark government bond rose, pushing its yield down 2 basis points to 5.64 per cent.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- 5 Terror threat level raised to severe as PM warns Isis risk could last for decades
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Terror threat level raised to severe as PM warns Isis risk could last for decades
Isis 'A Message in Blood' video shows beheading of Kurdish man in Iraq
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...