Thursday preview: ECB decision, Brexit debate, Ashmore and Bovis results
(ShareCast News) - The European Central Bank interest rate announcement takes place on Thursday while there will also be plenty of attention on Westminster as MPs debate the Brexit-related 'Great Repeal Bill', while in the City the early focus will be on results from the likes of Ashmore, Bovis Homes and Go-Ahead Group.
Facing its second reading in the House of Commons, the European Union (Withdrawal) Bill aims to repeal the European Communities Act 1972 and remove the competence of European Union institutions to legislate for the UK.
It has been called the most significant constitutional bill to be introduced by the government since the bill for the European Communities Act in 1972. (http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8079)
At 1245 BST the results of the ECB's meeting will closely watched as the bank has said it will decide its next move on quantitative easing "in the autumn".
The consensus forecast is for no change to interest rates and no decision on the fate of QE yet.
BofA Merrill Lynch was one that does not expect a decision on the fate of QE until next month: "The tightening of monetary and financial conditions driven by the EUR probably makes the central bank more sensitive than usual to market perceptions of the policy differential to the Fed.
"We also stick to our view that the ECB will announce in October that QE will be extended by six months at EUR 40bn per month. We think the ECB will then decay monthly purchases to zero throughout 2H18. But the central bank likes to keep as much optionality as possible, so an announcement of the 'full exit strategy' appears unlikely, even in October."
HSBC also believe an announcement on QE won't happen until October and predicts tapering to be "gradual through 2018, with no rate rises this or next year".
Also, HSBC noted that updated ECB staff forecasts will be published at this meeting. "We think the ECB will, once again, have to revise down its inflation projections by 0.1pp to 1.5% for 2019, mainly due to the recent euro appreciation. Continued strong data also suggest more momentum in economic activity and we expect GDP growth to be revised up in both 2018 and 2019."
Emerging markets asset manager Ashmore is due to report full year results, having already reported $58.7bn of assets under management and inflows of $1.9bn in the year to June, with consensus for revenue of £267.6m and 22.7p earnings per share.
UBS expects Ashmore to report higher full-year EPS of 22.9p, up 26.6% year on year on total revenues of £265.8m. "As Ashmore has already disclosed its FY2017 AUM and inflows, we expect a moderate market response to the earnings. Instead, the focus should be on any commentary management provides with regards to Q1 2018 client flows."
Barclays forecast net management fees £230m up 17% year on year compared to AUM up 12%.
"At the bottom line we forecast EPS up 13% yoy to 21p and DPS of 16.75p up 1% yoy. The market will be looking for management's outlook on progress of EM flow recovery."
Housebuilder Bovis Homes' new CEO Greg Fitzgerald will make his first outing at the interim results and strategy update.
"We suspect Greg will outline that Bovis' landbank is high quality, but the business has historically not executed on its plans effectively and cost control could have been better," said Numis.
"We suspect that the balance sheet will also be reviewed, and we think that if management is not going to pursue a volume growth agenda in the short term, that capital can be released and returned to shareholders. In our view the first half results will mark a low point for the group, as margins are impacted from lower sales volumes, high build costs carried into the year and the additional administration costs relating to customer care issues."
For EnQuest, where the 30% cut to second half net production guidance is still fresh in the memory, Barclays said the Kraken field ramp-up is likely to dominate the operational update.
"We expect the results presentation to provide some answers to the questions that lower near term production raise for the company's financial position through H2/17 and H1/18. However, we suspect management may remain limited in how much detail it can provide on discussions with lenders about deferring scheduled 2018 debt amortisation and the possible need to amend covenants."
Thursday September 07
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
Industrial Production (GER) (07:00)
Initial Jobless Claims (US) (13:30)
UK ECONOMIC ANNOUNCEMENTS
Halifax House Price Index (08:30)
Ashmore Group, CPL Resources, Frontier Developments, Go-Ahead Group, Mcbride, Redde
Biffa, Brady, Centralnic Group , Filta Group Holdings, Gama Aviation , Hunters Property , International Public Partnerships Ltd., Molins, ProPhotonix (DI), Sanne Group
SPECIAL EX-DIVIDEND DATE
Admiral Group, Pagegroup
Alpha Real Trust Ltd., BCA Marketplace, Best of the Best, Carpetright, Chelverton Small Companies Dividend Trust, Chelverton Small Companies ZDP shares, Cohort, Conviviality, Dart Group, Dixons Carphone , Imaginatik, Nakama Group, Polar Capital Technology Trust, Sophos Group
FINAL DIVIDEND PAYMENT DATE
IG Design Group, Triad Group
FINAL EX-DIVIDEND DATE
Best of the Best, BHP Billiton, Clipper Logistics , Colefax Group, Conviviality, Fletcher King, Gateley (Holdings) , Glencore , Goodwin Plc, Henderson Smaller Companies Inv Trust, National Westminster 9%pf, WYG
INTERIM DIVIDEND PAYMENT DATE
Fenner, Nexus Infrastructre , Tyman
INTERIM EX-DIVIDEND DATE
Acencia Debt Strategies Ltd., Admiral Group, Antofagasta, Arrow Global Group, Aviva 8 3/8% Cumulative Irrd Preference 1, BBGI SICAV S.A. (DI), Camellia, Capital & Counties Properties , Capital Drilling Ltd. (DI), Chesnara, Churchill China, Clarke (T.), Clarkson, Convatec Group , CRH, Eddie Stobart Logistics , Elderstreet VCT, Elementis, Eurocell , F&C UK Real Estate Investments Limited, Grafton Group Units, Greggs, H&T Group, Inspired Energy, International Personal Finance, IWG , Meggitt, Melrose Industries, Pagegroup, Phoenix Group Holdings (DI), Plus500 Ltd (DI), Polymetal International, Portmeirion Group, Rathbone Brothers, RSA Insurance Group, Savills, Shire Plc, The Gym Group, Trinity Mirror, UBM
QUARTERLY EX-DIVIDEND DATE
Fair Oaks Income Limited 2014 Shs NPV, Fair Oaks Income Limited 2017 Shs NPV, Honeycomb Investment Trust, Land Securities Group, Raven Russia Ltd 6.5% Red Cnv Pref Shs NPV, Raven Russia Ltd 6.5% Red Cnv Pref Shs Npv (RFD), Regional REIT Limited, UIL Limited (DI), Volta Finance Limited