The week ahead: Budget, HSBC, BP, Next, BT
26th October 2018 17:08
There's plenty to keep investors glued to their screens in the coming days as both the chancellor and some of the UK's biggest companies set out their plans for the year ahead. Lee Wild reports.
Monday 29 October
It certainly won't be a quiet start to the week as chancellor Philip Hammond announces the Budget on Monday.
For thoughts on what to expect, click below:
In company news, HSBC follows last week's results stream from the domestic banks with its own third-quarter results.
HSBC
Following a mixed week for the high street lenders, Far East-focused HSBC Holdings shares its latest quarterly results.
Analysts at UBS worry about weaker revenues at both HSBC's retail business and investment bank, which drops through to a reduction in earnings per share (EPS) forecasts of 3%. They rate the shares only ‘neutral' and have just cut their target price to 650p from 750p.
Foreign exchange weakness both in emerging markets and the UK during the third quarter could mean a headwind of around 2% of pre-tax profit.
HSBC shares currently trade on almost 12 times forward earnings and offer a prospective dividend yield of 6.2%. That looks attractive, but it is a premium to domestic banks, and investors worry about a number of likely impacts on revenue growth.
Source: TradingView (*) Past performance is not a guide to future performance
Trading Statements
HSBC
AGM/EGM
ITM Power
Tuesday 30 October
Oil prices have rallied in recent months and, although they've drifted back from multi-year highs this month, these results should reflect a rally through Q3. Many industry watchers believe Brent crude will make it back to $85-plus over the next 12 months.
"Iranian crude production will likely decline further after US sanctions on the country's oil exports come into effect on 5 November, and Venezuelan production continues to free fall," write analysts at UBS.
"To offset these losses, Saudi production is moving into uncharted territory, bringing spare capacity to a 10-year low.
"Further, market players are likely to grow concerned over how long the Kingdom can sustain its production level. Meanwhile, US shale won't be of much help due to pipeline constraints until mid-2019. This leaves the oil market vulnerable to further supply disruptions, in our view."
Trading on just under 11 times next year's earnings estimates, BP is more expensive than rival Royal Dutch Shell, but the pair yield roughly the same at a whisker under 6% and BP has at least begun increasing the payout. At second quarter results in July, BP raised the dividend by 2.5% to 10.25 cents, the first hike since the third quarter of 2014.
Source: TradingView (*) Past performance is not a guide to future performance
Trading Statements
Reckitt Benckiser, BP, PROACTIS Holding, Egdon Resources, Applegreen
AGM/EGM
Scancell Holdings, Angle, Real Good Food Company
Wednesday 31 October
Trading Statements
PPHE Hotel Group, Smurfit Kapp, Standard Chartered, Next, Computacenter, Gem Diamonds, ConvaTec, Just Group, GlaxoSmithKline, Velocity Composites
AGM/EGM
Vietnam Holding, MaxCyte, Defenx
Thursday 1 November
Trading statements
Carpetright, Smith & Nephew, RSA Insurance, Croda International, Lancashire Holdings, Shire, Indivior, Zeal Network, BT
AGM/EGM
Plutus Powergen
Friday 2 November
Trading statements
TP Icap, Paddy Power Betfair, Millennium & Copthorne Hotels
AGM/EGM
Axis Bank
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