Sheridan Admans, Investment Research Manager at retail stockbroker, The Share Centre, gives his thoughts on what to expect from companies announcing results w/c 20 January 2014.
SABMiller (Q3 trading statement)
Investors will be looking for any signs of growth from SABMiller’s emerging market operations. China will be of particular interest due to the slowing of its economic growth last year as volumes in the region now account for 24% of the company’s sales.
Investors will also be keen to see if its strategy to selectively reduce prices in its European operation is continuing to support volume growth.
We currently list SABMiller as a HOLD
Unilever (Q4 results)
We expect growth in Unilever’s European operations to remain challenged as consumer sentiment remains soft and competition in the US is likely to remain tough.
Investors will be expecting to see good performance in its emerging market operations as local products have helped spur growth. However, as it is highly exposed to emerging markets, adverse currency movements could be a drag.
We currently list Unilever as a BUY
BHP Billiton (Q2 results)
As economies around the world look to be heading into better shape, investors will be interested in the management’s outlook for commodities and looking for signs of recovery in the commodity market. BHP Billiton is a bellwether company for the sector and investors will be keen to hear any plans for further investments, which have been reined in recently.
We currently list BHP Billiton as a BUY
Sage Group (Q1 results)
The share price has performed well recently as Sage begins to move forward with selling more of its products through the cloud. Its client base tends to be small to medium firms and we therefore would expect more economic confidence flowing through to its software packages. However, the regional performances may contrast each other. Whilst we expect to see the momentum building in the US, UK and Ireland, Europe and particularly France have been problem areas for the company.
We currently list Sage Group as a HOLD
Companies reporting today include Land Securities (interim management statement) – HOLD
22 January, Minutes of the Monetary Policy Committee Meeting held on 8 and 9 January 2014 – Bank of England
The policy of forward guidance may be coming under pressure. Unemployment has fallen much faster than the Bank of England predicted, and is now approaching the level that, according to forward guidance, makes an increase in interest rates possible. However, with inflation also falling, did the MPC consider changing the forward guidance criteria affecting interest rates in its last meeting?
22 January, Labour Market Statistics January 2014 – ONS
In the three months to October, UK unemployment was 7.4%, with the number of people in employment increasing by 250,000, compared to the previous three months. Average wages, including bonuses, rose by 0.9%. With inflation falling, did the gap between price inflation and wage inflation fall in the three months to December, and did unemployment move even closer to the 7 per cent level, which under current forward guidance, makes a hike in interest rates possible?
Other economic announcements include:
- Quarterly Industrial Trends Survey – CBI
- Public Sector Finances, December 2013 – ONS
- EU Quarterly data on government debt Q3/2013 – Eurostat
- EU House price index, Q3 2013 – Eurostat
- Monthly Distributive Trades Survey – CBI
- EU Quarterly balance of payments, Q3 2013 – Eurostat