Thursday preview: Health check on bank credit, Hays and Cussons

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Thursday preview: Health check on bank credit, Hays and Cussons

Wed, 12 April 2017
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Thursday preview: Health check on bank credit, Hays and Cussons

(ShareCast News) - Thursday will provide an insight into UK credit conditions, a recent area of concern for the Bank of England's policy committee, while trading updates are due from recruiter Hays and soapmaker PZ Cussons.
Following other housing surveys in recent days, Thursday kicks off with the Royal Institution for Chartered Surveyors publishing its house price balance just after midnight.

A month ago, the RICS balance came out at 24 for the second month running, with prices in London and the North East creating a considerable drag and surveyors reported falling prices in London for 12 consecutive months.

As demand has weakened, the consensus forecast is for the balance to fall to 22.

HSBC said weak mortgage approvals suggest we may see a fall in the headline price index this month. "Additionally, stagnation in the RICS's new buyer enquiries index may point to softer demand."

Pantheon Macroeconomics predicted a fall to 20.

The Bank of England's quarterly credit conditions survey is due at 0930 BST, providing an overview of credit demand, availability and pricing in the UK banking sector. It will be examined to see if banks remain willing to advance more personal loans to consumers.

For the last quarter of 2016, it pointed to an improvement in demand for mortgages after a very weak third quarter, along with growing appetite for credit cards and other unsecured lending, but a downturn in corporate demand for credit.

The BoE's Financial Policy Committee has recently warned about the fast rate of consumer credit expansion credit -- saying it "could principally represent a risk to lenders if accompanied by weaker underwriting standards" -- so this survey is likely to receive extra scrutiny.

Chinese imports and exports

Later, Chinese trade data could prove illuminating as the domestic recovery at the People's Republic continues.

Exports fell 1.3% in February and the consensus forecast is for them to rise 3% year-on-year in March, amid continued strength in imports.

"The domestic recovery remains strong and is likely to continue to provide support to import growth; however, we expect some moderation in imports in March amid a moderation in commodity prices," said HSBC.

Corporate updates

Recruiter Hays report third-quarter trading, having in February said the vast majority of its markets remained positive and the return to work in the key temporary and contractor markets had been solid, but that the timing of Easter would this year fall entirely into the fourth quarter.

Broker Numis forecast like-for-like net fee growth of 7%, including a benefit of circa 2% due to the timing of Easter.

UBS put its estimate at 6% growth, and on an underlying basis expected a slight pick-up versus the 2% growth reported for the second quarter.

"With nine months of the financial year year now completed Hays typically comment on market expectations, but with consensus at £203m for FY17 EBIT we do not expect any material changes," UBS said.

Numis said there were no grounds to expect any surprises from PZ Cusson from its own third quarter trading statement, although the company does have quite a second-half profit bias.

With more than a third of group sales coming from Nigeria, events in the country are likely to be prominent in the commentary.

"The joys of this market are its fast-expanding population and the fact that PZC has traded here for 100-plus years with a superb sales and manufacturing infrastructure. The negative is the recent sharp fall in the value of the Naira versus the US$ of circa 25% last financial year and circa 40% in the first half," said analyst Charles Pick.

He was hoping to hear about management actions to cope with the devaluations seen in Nigeria, brand renovation in Europeto avoid fights with Unilever at the UK washing and bathing division, successes at the beauty division, actions in the UK to mitigate the impact of higher input costs resultant from the weak pound and commodity price rises, news on rebuilding
profitability in Australia, and brand launches in Indonesia.

Thursday April 13

Consumer Price Index (GER) (07:00)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
Producer Price Index (US) (13:30)
U. of Michigan Confidence (Prelim) (US) (15:00)

Hays, PZ Cussons

Abcam, Clinigen Group, Dunelm Group, Trifast, Tristel

Manchester & London Investment Trust, Northamber

GlaxoSmithKline, Regional REIT Limited

JPMorgan Asian Investment Trust, Middlefield Canadian Income PCC

M. P. Evans Group

Asian Growth Properties Ltd Com Shs (DI)

esure Group, Savills, Sherborne Investors (Guernsey) 'B' Limited

Drax Group, Heavitree Brewery, ROS Agro GDR REG S

Grafton Group Units, Low & Bonar

AFH Financial Group , Arbuthnot Banking Group, Belvoir Lettings, Chesnara, Clarke (T.), esure Group, Globaldata, Gulf Marine Services, International Personal Finance, Johnson Service Group, JPMorgan American Inv Trust, Private & Commercial Finance Group, Reckitt Benckiser Group, Savills, Secure Trust Bank, Standard Life, Taylor Wimpey, Travis Perkins

NASDAQ 100 Top Risers

Name Last Chg.% Time
Liberty Interactive Corporation QVC Group 23.19 2.38 22:33
American Airlines Group 45.42 2.34 23:01
Viacom Inc. Class B 27.72 2.14 22:33
CSX Corp. 52.81 1.99 22:44
Henry Schein Inc. 80.39 1.58 23:03

NASDAQ 100 Top Fallers

Name Last Chg.% Time
Adobe Systems Inc. 149.96 -4.24 23:10
Skyworks Solutions Inc. 103.51 -4.10 23:04
Western Digital Corp. 86.37 -3.95 23:03
Microchip Technology Inc. 88.32 -2.92 22:33
Walgreens Boots Alliance, Inc. 78.84 -2.92 23:03