Thursday preview: UK credit conditions in focus, Asos updates

Asos and Babcock will provide quarterly trading updates on Thursday, with macroeconomic data on the including RICS' house price report, Chinese trade data and some inflation numbers in Europe and the US.

AIM online retail star Asos is expected to have enjoyed a good four months to 30 June, following a first half where it reported revenues up 37% or 31% at constant currencies and a third quarter last year where sales were up 30% on sterling terms and 26% in constant FX.

"We believe underlying trading strength has continued during the period, at not dissimilar levels to the prior period," said broker Shore Capital, which expects growth to be augmented by a circa-7% currency tailwind.

UBS forecast third quarter retail sales growth of 35%, with constant FX sales growth of 27% boosted by a 8% FX impact.

Telling clients what to look out for, analysts added: "There may be an update on the US distribution centre location and timing of opening, an update on how ASOS will react to the sales tax in Australia and some early commentary on how the ASOS own label sportswear ranges and cosmetics business is progressing."

With Babcock's share price has struggled to make any headway this year and the recent UK general election result in the adding a further element of uncertainty, the Share Centre was optimistic for good news.

"In the last update the group stated that they have identified significant opportunities across their core markets and that they remain confident to achieve mid-single digit organic revenue growth this year. Investors will be hoping for further news on these opportunities," analysts said.

MACRO MATTERS

With the Bank of England having noted its concerns about the level of consumer lending bubbling higher in recent years, the quarterly Credit Conditions Review will be closely scrutinised in many quarters.

In its June meeting, the Financial Policy Committee raised the countercyclical capital buffer to 0.5%, with a commitment to raise it further in November should economic data evolve in line with expectations.

Barclays economists said it was widely expected that the survey should show credit availability already tightened in the second quarter, given policy measures undertaken.

Chinese economic data often has an impact on London's commodities heavyweights, with trade data due overnight estimated to show exports growing at a faster pace as global demand is likely to have held up well.

New export orders in both the official and Caixin manufacturing PMIs rose further in June, also pointing to favourable external demand, while the consensus is for export growth to improve to 9.0% from 8.7% last time, imports to ease to 14.0% from 14.8% and the trade balance to grow to $42.8bn from $40.8bn last time.

Looking to the UK's housing market, the Royal Institution for Chartered Surveyors will publish its house price balance for June overnight.

Economists at HSBC said May's RICS data were consistent with their view that the UK housing market is "slowing materially", with metrics of demand and activity softening month on month.

Although the survey pointed to continuing supply constraints, the main house price index slipped by five points to +17, while price expectations weakened too.

"Given the inflation squeeze on households, a possible correction from high price levels and Brexit-related uncertainty, the softening looks set to persist. We expect the house price index to edge down by another two points in June, to +15."

Thursday July 13

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Initial Jobless Claims (US) (13:30)
Producer Price Index (US) (13:30)

FINALS
AdEPT Telecom, Dart Group

TRADING ANNOUNCEMENTS
ASOS, Babcock International Group, Hays, ITE Group, Premier Oil

AGMS
Atalaya Mining, Babcock International Group, BTG, Burberry Group, Helical, JPMorgan Income & Capital Inv Trust, Land Securities Group, Northern 3 VCT, Redt Energy , Renewi , Sports Direct International, Summit Germany Limited, Telford Homes, Templeton Emerging Markets Inv Trust, Templeton Emerging Markets Inv Trust, Templeton Emerging Markets Inv Trust, Triple Point VCT 2011, Wynnstay Properties

FINAL DIVIDEND PAYMENT DATE
Inspired Energy, Young & Co's Brewery 'A' Shares, Young & Co's Brewery (Non-Voting)

FINAL EX-DIVIDEND DATE
Anpario, Calculus VCT 'D', Castings, Cropper (James), D4T4 Solutions, Dekeloil Public Ltd, Establishment Inv Trust, F&C Global Smaller Companies, Halma, Invesco Asia Trust, Mission Marketing Group, Mountview Estates, Sirius Real Estate Ltd., Supergroup, Ventus 2 VCT, Ventus VCT, VP

SPECIAL EX-DIVIDEND DATE
Chrysalis VCT, Establishment Inv Trust

INTERIM EX-DIVIDEND DATE

Autins Group, Blackrock Income And Growth Investment Trust, Chrysalis VCT, Netcall, Safestore Holdings, Schroder UK Mid Cap Fund, Treatt, WH Smith

QUARTERLY EX-DIVIDEND DATE
JPMorgan Asian Investment Trust, Merchants Trust, Middlefield Canadian Income PCC, Primary Health Properties