Thursday preview: BoE seen standing pat; Balfour Beatty, Sainsbury's to report
The main focus for Thursday’s session will be the Bank of England’s latest policy announcement, while on the corporate front, an update from Sainsbury’s and full-year results from Balfour Beatty will be eyed.
BoE to stand pat
The BoE, which cut interest rates to a record low of 0.25% and expanded its asset purchase programme to £435bn in the aftermath of the Brexit vote, is widely expected to stand pat on policy.
HSBC said the Bank was “decidedly neutral” in its February Inflation Report, revising growth up sharply, but also insisting that the forecast overshoot in inflation was entirely due to the currency, and not domestically generated pressures.
It expects the BoE to remain neutral this month, voting unanimously to keep policy unchanged.
Deutsche Bank also expects the BoE to maintain its neutral bias, but said the minutes may include some modest tilt towards a more hawkish message, for example, incrementally greater concern about the limits of inflation being reached.
“The hawkish surprise would be if one or two MPC members explicitly vote in favour of policy tightening. With the latest round of sovereign QE having concluded the door may now be open to the hawks. It is probably too soon this month, but minority dissent in favour of tighter BOE policy should be considered a risk within the next few months.”
Balfour Beatty results, Sainsbury's update due
On the corporate front, infrastructure group Balfour Beatty is due to release its full-year results.
UBS expects sales including JVs of £6.25bn, profit from operations of £73m and pre-exceptional pre-tax profit of £59m. It reckons the company will report year-end net cash of £69m and FY16 average net debt of £95m.
“A key risk is the pension deficit which we expect at £125m (pre-tax) though movements across the sector have suggests sharper increases. We expect an outlook for progress, mostly as the Build to Last transformation starts to take hold and Construction returns to profitability from a loss before. We currently anticipate £168m of operating profit and pre-tax profit of £143m for FY17 and expect guidance to be consistent with this.”
Meanwhile, supermarket retailer Sainsbury’s will be updating the market on its fourth quarter trading.
HSBC said it expects the group to report flat grocery like-for-like sales, noting that recent Nielsen data showed the grocery market endured a week January and a slightly better February.
“We therefore forecast a slowing from Sainsbury’s 3Q17 update with flat ex-fuel total sales and circa -1% ex-fuel LFL. For Argos, Christmas LFL growth was good at +4% but the lack of an upgrade to guidance implies it was achieved at the expense of profit margins. For 4Q we expect LFL growth of +2% against soft comps. We do not expect any change to full year profit guidance or a change in consensus.”
Thursday 16 March
INTERIM EX-DIVIDEND DATE
Abcam, AdEPT Telecom, ECO Animal Health Group, Haynes Publishing Group, JPMorgan Mid Cap Inv Trust, London Finance & Investment Group, Revolution Bars Group, Trifast, Waterman Group
QUARTERLY PAYMENT DATE
QUARTERLY EX-DIVIDEND DATE
Alpha Real Trust Ltd., Assura , XP Power Ltd. (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Building Permits (US) (12:30)
Consumer Price Index (EU) (10:00)
Continuing Claims (US) (12:30)
Housing Starts (US) (12:30)
Initial Jobless Claims (US) (12:30)
PJSC Megafon GDR (Reg S)
EMIS Group, M&C Saatchi, Miton Group, OneSavings Bank, Oxford Biomedica, Parity Group, PJSC Megafon GDR (Reg S), Shin Kong Financial Holdings Co Ltd GDR (Reg S)
Allianz Technology Trust
Banco Bilbao Vizcaya Argentaria SA, Henderson Opportunities Trust
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
FINAL EX-DIVIDEND DATE
Aberdeen UK Tracker Trust, Apax Global Alpha Limited , BlackRock World Mining Trust, British American Tobacco, Crest Nicholson Holdings, Dairy Farm International Holdings Ltd. (Singapore), Direct Line Insurance Group, Domino's Pizza Group, Essentra, Glanbia, Grafton Group Units, Hammerson, Hongkong Land Holding Ltd. (Sing.Reg), Jardine Matheson Holdings Ltd (Singapore Reg), Jardine Strategic Holdings Ltd. (Singapore), Law Debenture Corp., Low & Bonar, Mandarin Oriental International (Singapore), Millennium & Copthorne Hotels, Randgold Resources Ltd., RM, XLMedia