The Week Ahead: HSBC investors bracedfor bad news on loans
The banks' reporting season continues with HSBC's full-year results today, and although Shore Capital's Gary Greenwood believes the self-anointed "world's local bank" will have enjoyed strong growth in emerging markets, he says this will be "offset by a reduction in developed markets, largely reflecting a smaller US balance sheet and weaker investment banking revenues".
Given that in November HSBC announced that loan impairments had seen a £1bn quarter-on-quarter jump, the analyst feels the latest on this will be the main issue for investors.
"We will also be looking to see how HSBC is progressing with its strategic plan to restructure the group to be more focused on growth markets and markets where it has a strong incumbent position," he adds.
Results/Updates: Associated British Foods, Bovis Homes, Bunzl, Cookson, Dialight, Essar Energy, Hiscox, HSBC, Keller, Pearson, Senior, Staffline, Ultra Electronics and WSP Group.
Whitbread announces its pre-close update on Tuesday and the Costa Coffee-owner will be hoping the reaction will not be a repeat of when it released its last statement back in December. Then, the leisure giant's share price was knocked by its admission that sales growth had slowed, although it still said full-year results would meet expectations.
Panmure Gordon notes that recent data from both the restaurant and hotel sectors has been mixed, and believes that any risks to the market's forecasts for the following financial year are on the downside. The broker predicts pre-tax profits for the next 12 months of £346m, but notes that if revenues per available room at its Premier Inn business see a 1.2 per cent fall, this would drop to £325m.
Results/Updates: AZ Electronic Materials, Craneware, CRH, Elementis, GKN, moneysupermarket.com, Perform, Persimmon, Petra Diamonds, Promethean, Provident Financial, Rotork, SDL, Serco, United Business Media and Whitbread.
The last of the UK-listed banks to report their final results, Standard Chartered announced a detail update in December, when it predicted it would manage a record profit, so there are unlikely to be any major shocks on Wednesday. Morgan Stanley's Chris Manners believes that although the group's income and profit from India will be weak, strong performance in countries including Hong Kong, Singapore and China will more than make up for this.
Results/Updates: Capital & Counties Properties, Carillion, Helphire, Henderson, International Airlines Group, International Personal Finance, Interserve, ITV, Lavendon, National Express, Restaurant Group, RSM Tenon, Sportingbet, Standard Chartered, Taylor Wimpey and Weir Group.
With Spirent's preliminary results out on Thursday, Deutsche Bank believes that following encouraging results from its peers, the telecoms testing group could beat forecasts. The broker's analysts predict that fourth-quarter revenues will have risen by 5 per cent from the previous three months to $136m, while they believe the company will point to a gradual improvement in customer spending over the current financial year.
Man Group has mounted something of a rally since its trading statement in January, before which its share price had more than halved in under four months. The hedge fund giant will hope it can keep rising after announcing its nine-month figures on Thursday, and given that Man has already said it expects an adjusted pre-tax profit of $257bn, RBC's analysts expects few surprises.
Results/Updates: Derwent London, Fiberweb, Hardy Underwriting, Howden Joinery, Jardine Lloyd Thompson, Kazakhmys, Man Group, Office2office, Robert Walters, Spirent, Stagecoach, UNITE, WPP and Xchanging.
Rentokil Initial's troubled courier unit City Link will once again be in focus on Friday when the rat catcher posts its preliminary results. Numis Securities' Mike Murphy is expecting the business to post a loss of £24m, and says that, although early in the year, investors will be "looking for guidance that the issues at the operation have been sorted".
Results/Updates: BBA Aviation, IMI, Jardine Matheson, Laird and Rentokil Initial.
TODAY: US pending home sales.
TOMORROWL CBI distributive trades survey; Eurozone business confidence; Eurozone consumer confidence; US consumer confidence; US durable goods orders.
WEDNESDAY: Consumer credit; GfK consumer confidence; Lending trends; M4 money supply; Mortgage approvals; US beige book; US Federal Reserve chairman Ben Bernanke speaks to Congress;US Q4 GDP (second estimate).
THURSDAY: Manufacturing PMI;US initial jobless claims;US manufacturing ISM;US personal spending.
FRIDAY: Construction PMI;Eurozone PPI.
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