sTOCK MARKET WEEK No longer the economic bellwether, ICI faces a long, hard slog

Is the worst over for Imperial Chemical Industries, once a bellwether group but now a rather pale shadow of its old self?

This week it is due to produce its year's results; they will be poor, probably not much above pounds 600m against pounds 951m in the previous year.

Few dispute that ICI is a well run company and has admirable defensive qualities. Its sad underperformance stems more from factors beyond its management's control, such as a tough trading environment and the eroding impact of the powerful pound.

The dividend should be lifted by 7 per cent to 32p, although in real values the payment will be lower than in 1979.

In group terms ICI's management must feel rather rueful when looking back at the decision, largely prompted by the unwelcome attentions of Lord Hanson, to demerge its Zeneca drugs business.

From a shareholder standpoint it was a brilliant move. As a stand-alone company Zeneca's merits as a powerful and successful player in the high flying drugs industry were there for all to see and its shares, valued at 600p for the split, have soared into the stratosphere. On Friday they reached yet another peak 1,804.5p.

In contrast, poor old ICI has put on a much more subdued performance. True, its shares have made progress since the break up but in more recent times their direction has been mostly downhill with the price (754.5p) a long way from the 954p peak, established early last year.

It could be argued that the removal of Zeneca took away ICI's glamour. And it also left it stuck in mature, uncompromising markets where growth is hard to achieve and anything remotely spectacular is as likely as old English sheepdogs losing their appeal.

Bulk chemicals, explosives and paints are hardly a cocktail for growth in the present climate; so even if ICI is over the worst it's going to be a long, hard slog with only modest reward.

Some think the group's future is bleak. There is a school of City thought that profits will reach around pounds 750m next year, then sag towards pounds 400m when the world is celebrating the millennium. Strong sterling, overcapacity and little world-wide economic growth are the factors cited for ICI's future discomfort.

It could, of course, change the market's perception by barging into new areas, perhaps launching a takeover bid. Its last big strike was in the 1960s with its rip-roaring but abortive bid for Courtaulds.

Certainly ICI is beginning to look as if it must stir itself - if it doesn't it will find a predator snapping at its heels.

For years its performance was seen as a rough and ready guide to the state of the nation's economy. Its quarterly figures were an important event in the investment calendar, often a significant influence in the direction of the stock market. They are still important but ICI is now a supporting player, the 40th-ranked Footsie constituent with a market capitalisation of pounds 5.4bn.

It lags behind two other blue chips reporting this week, BT and BSkyB and is level pegging with the fourth, BAA.

BT, like ICI, will produce its figures on Thursday - the favourite reporting day for many top groups. ICI can, however, point to tradition for its penchant for a Thursday; BT, as a newcomer, merely hopped on the bandwagon.

Thursday's popularity stems from rather more leisurely times when the great and the good would journey from their country retreats to attend board meetings in the City.

For non-executive directors a week in London for a meeting held certain attractions. They could leave home on Monday, spending Tuesday doing what non-execs away from home like to do, attend meetings on Wednesday to rubber stamp the decisions of the working directors and then, on Thursday or Friday, make their way home.

The results of the Wednesday meeting are made known early on Thursday, although there have been odd occasions when results inadvertently slipped out on a Wednesday.

BT should manage a near 7 per cent profits gain to pounds 885m in its third quarter.

Analysts note that when presenting its interim results in November, it was in its most optimistic mood for years. Another rousing display is expected. Year's profits should come in at pounds 3.1bn against a shade above pounds 3bn.

It is unlikely that BT will have much to say about its planned pounds 12bn merger with US group MCI. The proposed get-together is currently bogged down in the cantankerous outcry which engulfs every big deal these days and is attracting the attention of an array of regulatory bodies.

The market view is that despite the howls from competitors and the scrutiny from London, Washington and Brussels the deal will get the go-ahead.

However, whether it is the best way for BT to develop in the US market is a matter of some conjecture. There is a feeling in some quarters that it is already well placed in the vast US telephone arena to take advantage of the ending of controls in 2001.

BSkyB, deep into digital development and with an impressive array of new allies, should produce a resounding interim profit gain - say by as much as 40 per cent to around pounds 150m.

The satellite television station is still the main market play for investing in digital television and Neill Junor at NatWest Securities says: "Whilst we remain sceptical of the group's fundamental long-term value, we do not see it as appropriate to reduce holdings in the short term."

BAA, formerly the British Airports Authority, is due to land with third- quarter figures today. Like BT, the dark cloud of a Labour Party windfall tax is on the horizon.

But trading should be going well. It has survived in fine shape its last regulatory review and profitability should be on a rising trend. Nine- month figures of pounds 392m compared with pounds 361m is the expectation.