Economics
Interest rates The Bank of England will release its latest quarterly Inflation
Report and forecasts for economic prospects on Wednesday. After its
decision to keep interest rates on hold last week, the report and a press
conference by Mervyn King, the Bank’s Governor, will be closely watched for
clues to its next move.
Inflation on the Consumer Price Index is expected to have risen further
above the Bank of England’s 2 per cent target, to 2.6 per cent in April,
from 2.5 per cent in March, in figures due out tomorrow. On the Retail Price
Index, inflation is expected to remain unchanged in April from the annual
3.8 per cent reported for March.
Unemployment on the claimant count is forecast to have remained
unchanged in April in figures due out on Wednesday.
Average earnings growth in March, in data due out on Wednesday, is
expected to have remained unchanged at a headline annual rate of 3.7 per
cent, matching February’s pace of increase.
Producer output prices for the cost of goods leaving factories are
expected to have risen by 0.6 per cent in April, after a 0.9 per cent gain
in March, lifting their annual rate of increase to 6.4 per cent, from 6.2
per cent, according to data due out today.
Producer input prices, for the cost of raw materials, components and
fuel, are tipped to have risen by 1.4 per cent in April, driven by a 4 per
cent jump in oil prices and after a 1.8 per cent rise in March. The annual
rate of producer price inflation is forecast to rise to 21.5 per cent.
House prices Figures from the Department for Communities and Local
Government, due out tomorrow, are tipped to show annual house price
inflation down to 3.9 per cent in March, from 6.7 per cent in February.
The trade gap is expected to have remained unchanged in March at £4.4
billion, in figures due out today.
Eurozone GDP growth in the first quarter is tipped to be unchanged from
the final quarter of last year, with a gain of 0.4 per cent, in data out on
Thursday.
Eurozone inflation is expected to have eased to 3.4 per cent in April,
from 3.6 per cent in March, in figures due out on Thursday.
Eurozone industrial productionis tipped to have fallen by perhaps 0.2
per cent in March, after a 0.3 per cent gain in February, in data due out on
Wednesday.
French GDP is forecast to have risen by about 0.5 per cent in the first
quarter, after a 0.4 per cent gain in the final quarter of last year, in
data due out on Thursday.
Germany’s economy is forecast to see its GDP rise by 0.7 per cent
in the first quarter, from 0.3 per cent in the final quarter of last year,
in figures out on Thursday.
US inflation is tipped to have eased in April to an annual rate of 3.9
per cent, from 4 per cent in March, according to figures due out tomorrow.
Japan’s GDP growth is expected to have slowed to 0.6 per cent in
the first quarter, from 0.9 per cent in the final quarter of last year,
according to preliminary data due out on Friday.
Banking
& finance
HSBC, the banking group, is expected to say today that it is writing
off a further $4.6 billion (£2.35 billion) against mortgages, credit cards
and other loans to stricken US consumers, bringing the total over the past
15 months to almost $17 billion.
Royal Bank of Scotland The US Securities and Exchange Commission is
investigating Royal Bank of Scotland over its exposure to American sub-prime
mortgages. (The Sunday Times)
Pearl AssuranceHugh Osmond, the serial entrepreneur, is considering
relocating Pearl Assurance, his financial services group, outside the UK for
tax purposes.
Construction
& property
Land Securities, the commercial property group, is expected to provide
investors with an update on its proposed three-way demerger plan alongside
its full-year results on Wednesday, which will also include the first
valuation of its property portfolio since September – just before the credit
crisis began to affect the UK’s commercial property sector.
Consumer
goods
Premier Foods, the producer of Mr Kipling cakes and Branston Pickle,
will give a trading update tomorrow after a difficult start to 2008. The
group has struggled with soaring food prices and interest payments on its
£1.6 billion debts after the acquisitions of Campbell’s Soup and RHM, which
makes Hovis bread.
Engineering
VT Group investors will look for an update on progress with the delayed
programme to build two new aircraft carriers for the Royal Navy when it
delivers its full-year results tomorrow. Analysts expect pretax profits of
£87.4 million, against £74.2 million last time.
Nissan, the Japanese carmaker, is expected to announce soon that its
factory in Sunderland will lose the production of the Micra, its small car,
when the replacement model is launched in 2010. (The Sunday Times)
Health
Orion Corporation, the Finnish pharmaceuticals group, will not continue
with the development of its COMT enzyme inhibitor that enhances the
therapeutic effects of its treatment for Parkinson’s disease. The inhibitor
had ended its clinical Phase-I assessment.
Industrials
Solvay, the Belgian chemicals group, is expected tomorrow to report a
decline in first-quarter pretax earnings to €302 million (£239.5 million),
from €325 million last year, because of the divestment of its caprolactone
business and margin pressures on its European PVC operations.
Leisure
TUI Travel and Thomas Cook will give their verdict on the travel sector
when they report interim figures tomorrow and on Thursday respectively. The
market will focus on figures for summer 2008 and bookings for 2009 rather
than performance over the past six months, with strategies to combat the
soaring cost of oil also expected to be high on the agenda.
Media
Mediaset, Italy’s biggest private broadcaster, which is owned by Silvio
Berlusconi, the country’s new Prime Minister, is expected to report a slight
fall in its first-quarter net profits tomorrow as higher costs offset an
11.4 per cent rise in revenues.
Taylor Nelson Sofres, the UK market research group, is facing a hurdle
in its efforts to merge with GfK, its German rival, because of political
concerns about prospective job losses at the combined group. (The Sunday
Telegraph)
Natural
resource
Vedanta Resources, the London-listed mining group, is expected to
report higher full-year profits on Thursday as an increase in production
from most of its key divisions more than offset mixed metal prices and
higher costs. Deutsche Bank is forecasting pretax operating profits of $2.9
billion (£1.48 billion), from the $2.7 billion reported last time.
Retailing
White Stuff, the fashion label and retailer, will confirm today that
George Treves and Sean Thomas, its two founders, intend to sell a minority
stake in the business. Its full-year operating profits have more than
doubled to £6.9 million.
J Sainsbury Justin King, the chief executive of J Sainsbury, will be
awarded a bonus of about £6.5 million on Wednesday as he unveils a 25 per
cent increase in full-year pretax profits at the supermarket chain. Staff
will share a bonus pot of £50 million.
DSG, the electricals retailer, is expected to announce plans to cut its
dividend in half and close dozens of high street stores on Thursday when
John Browett, the group’s new chief executive, announces his turnaround
plans.
Best Buy, the American electricals giant, is weighing up bids for Comet
and Currys in Britain after snapping up half of the retail unit of Carphone
Warehouse for £1.1 billion last week. (The Mail on Sunday)
Support
services
Compass, the catering group, will update investors on the progress of
its management and performance programme on Wednesday when it reports its
interim results.
Technology
Datatec, the American technology group, is expected on Wednesday to
report an increase in full-year underlying earnings, driven by its exposure
to emerging markets, tight cost control in the United States and improved
trading in Logicalis, its reselling division.
Yahoo! Eric Jackson, the dissident investor seeking to oust Jerry Yang
as chief executive of Yahoo!, the internet search engine, is holding
emergency talks with Silicon Valley executives who have been closely linked
to Microsoft’s failed $45.7 billion (£24 billion) bid to buy the troubled
group. (The Observer)
Telecoms
Telefónica, the Spanish telecoms group that owns O2, is expected
to report a first-quarter net profit of between €1.5 billion (£1.18 billion)
and €1.6 billion on Wednesday, up from €1.3 billion last year, driven by its
mobile phone operations in Latin America.
Vodafone, the telecoms group, said that it had no intention of pursuing
a £20 billion bid for MTN, Africa’s largest mobile phone operator. Last week
MTN revealed that it was in talks about the sale of a majority stake to
Bharti Airtel, its Indian peer.
BT, the telecoms group, is in talks to sells its British data centres
to Hewlett-Packard, the US computer group, in a £1.5 billion deal. BT will
report its preliminary results on Thursday. (The Sunday Times)
Transport
FirstGroup, whose First Great Western rail service was labelled
“unacceptable” by ministers this year, is expected on Wednesday to report
full-year pretax profits of £248 million, up by 77 per cent on last time.
Royal Mail Business customers are deserting Royal Mail and most
companies do not find the postal group an efficient organisation to work
with, according to a study by the British Chambers of Commerce.
Utilities
E.ON, the owner of Powergen, is expected on Wednesday to report a 2 per
cent rise in first-quarter adjusted pretax earnings to €3.34 billion (£2.64
billion) as nuclear plant outages offset solid profits in power generation.
RWE, owner of nPower, is tipped to report on Thursday a 5.5 per cent
drop in first-quarter operating profits to €2.7 billion after a fall in its
power trading operations.
Centrica is suing Accenture, the consultancy group, for £182 million
over an IT system that it claims reduced the customer billing process at its
British Gas subsidiary to a shambles.
The web of debt slowly stifles world ecomomies as the greed of oil and other commodity speculators grows stronger...Let the stock market investors be-aware!
Michael Levy, Foprt Lauderdale, USA