Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Mini-budget, BoE, Fed and a packed City diary ahead, including Haleon, Halma, JD, S4 and Playtech

Stock Markets Sep 19, 2022 05:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Mini-budget, BoE, Fed and a packed City diary ahead, including Haleon, Halma, JD, S4 and Playtech
 
UK100
-0.19%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
KGF
+2.24%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SMIN
+0.44%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HLMA
+2.16%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PTEC
+2.18%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
KWS
+0.88%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Many financial events in the coming week have been shifted back to make way for the Queen’s funeral on Monday, which will lead to a packed City diary on most days, with results including Haleon, JD Sports, Kingfisher (LON:KGF), Halma (LON:HLMA), S4 Capital, Keywords Studios, Smiths Group (LON:SMIN) and Alphawave.

The Bank of England also moved its policy meeting back by a week, which will add to the central bank theme, with the US Federal Reserve and the Bank of Japan.

New UK Chancellor of the Exchequer Kwasi Kwarteng is also said to be planning to announce an emergency budget on Friday, to finish off the week.

TUESDAY 20 SEPTEMBER

Tuesday's big news in the City is likely to be the maiden results from HALEON PLC (LON:HLN), which was spun out of GSK straight into the FTSE 100.

Life as a separate company has not been easy, with the shares initially sliding as many Glaxo investors turned their noses up at the Sensodyne maker, before this turned into a full-blow tumble (along with those of their former parent) after the launch of legal claims that stomach acid drug Zantac cause cancer.

While this legal shadow is expected to persist for a while, focusing on the core business the key will be maintaining its top-line growth target and whether the consumer trend for 'trading down' during this cost of living squeeze affects Haleon's brands.

Another blue-chip that is expected to be exposed to the squeezed consumer is Kingfisher PLC (LSE:KGF), which is also being hit by the normalisation of trading back down from pandemic highs.

The B&Q owner revealed a 5.4% decline in like-for-like sales in a first-quarter update in May, but analysts are expecting a better second quarter.

Significant announcements scheduled for Tuesday

Trading announcements: Sthree PLC, Moonpig PLC

Interims: Alliance Pharma (LON:ALAPH) PLC (AIM:APH), Cambridge Cognition Holdings PLC (LON:COGC) (AIM:COG), Distribution Finance Capital Holdings PLC, EKF Diagnostic Holdings PLC, Elixirr International PLC (AIM:ELIX), Fintel PLC (AIM:FNTL), First Tin PLC (LON:1SN), Haleon Group PLC, Gaming Realms PLC (AIM:GMR, OTCQX:PSDMF), Hostmore PLC (LSE:MORE), HydrogenOne Capital Growth PLC (LSE:HGEN), Jadestone Energy PLC (AIM:JSE), Kingfisher PLC (LSE:KGF), Spectral MD Holdings Ltd (AIM:SMD), Trinity Exploration & Production PLC (AIM:TRIN), Xaar PLC (LSE:LON:XAR)

Finals: Brown Advisory US Smaller Companies PLC, City of London Investment Trust (LSE:CTY) PLC, Craneware PLC (AIM:CRW), Feedback PLC (AIM:FDBK), Litigation Capital Management Limited

AGMs: Appreciate Group PLC (LSE:APP), Babcock International Group (LON:BAB) PLC, Cake Box Holdings Limited, DSW Capital PLC (AIM:DSW), FIH Group Plc (AIM:FIH), Global Ports Holding Ltd, Gore Street Energy Storage Fund PLC (LSE:GSF), Ilika PLC (AIM:IKA, OTCQX:ILIKF), Manolete Partners PLC (AIM:MANO), Moonpig Group PLC (LSE:MOON), ProCook Group PLC (LSE:PROC), Quiz PLC (AIM:QUIZ), Shearwater Group PLC (AIM:SWG), TwentyFour Income Fund Ltd (LSE:TFIF)

Economic updates: Building Permits (US), Housing Starts (US)

WEDNESDAY 21 SEPTEMBER

Wednesday’s big news will be the size of the interest rate hike and anything else from the US Federal Reserve.

Fed head Jerome Powell will announce the latest decision from the Federal Open Markets Committee after the US central bank already hiked rates four times so far this year, from the record low of 0.25% all the way to 2.50%, the highest level since July 2019.

Powell and co have accelerated the pace as inflation has ramped higher than expected, starting with a rise of a quarter of a percent, then doubling the hike to 0.5 percentage points and then following that with two 0.75-point hikes.

The market’s money is currently predicting another three-quarter-point hike to 3.25%, with a full one-percentage-point rise to 3.50% second favourite.

Either way it would be the highest US interest rate since early 2008, when Powell’s predecessor-but-one Ben Bernanke was slashing borrowing costs in the wake of the credit crunch.

Also in focus will be comments from Powell about the Fed’s quantitative tightening (QT) programme as it looks to shrink its massive balance sheet.

“The Fed’s balance sheet is already slowly shrinking, and this withdrawal of liquidity could be an interesting test for US equities, which seem to have bathed in the dollops of cheap cash that the US central bank has provided,” said analysts at AJ Bell.

“This why the debate over the so-called Powell Pivot, and if or when the Fed does a U-turn and starts cutting rates (and even adding to QE again), is so important.”

London’s company diary is fairly full again, especially some well-followed mid-cap names.

Semiconductor IP company Alphawave IP Group (LON:IPO) PLC (LSE:AWE) may be followed in as much for the drama of potential bad news as good, after the stock tumbled only a few months after its listing last year, when the FT’s Alphaville team revealed its heavy reliance on a small number of customers, some of which via “close and undisclosed relationships”, including via family ties and companies owned by directors.

Since then, despite worrying investors further with delayed results, things seem to be going a bit better for Alphawave, with mid-term guidance reiterated.

Another company that worried investors earlier this year by delaying results – several times in this case – was Sir Martin Sorrell’s S4 Capital PLC (LSE:SFOR).

Since then it has delivered another update on time, before issuing a profit warning in July, with underlying earnings (EBITDA) expected to be £120mln for the year, or around 25% below market expectations at the time.

With S4’s peers all reporting robust top-line growth for the first half, broker Peel Hunt said it expects S4 to follow this trend, with the focus on profit margins and what Sorrel has to say about the outlook for client spending for the rest of the year.

Elsewhere, results from Keywords Studios PLC (AIM:KWS, OTC:KYYWF) will be closely watched by followers of the computer games market, as the acquisitive group covers most bases in the industry.

The specialist services supplier is expecting to report a 34% increase in half year revenues, including 22% organic growth, with underlying pre-tax profit anticipated to be up over 35% to about €54mln.

Looking ahead though, Keywords guided last month that margins are moving to historic levels of around 15% as it invests in the business, transitions people and work from Russia, and as more costs return and economic headwinds blow.

Analyst Derren Nathan at Hargreaves Lansdown (LON:HRGV) said: “It would be good to get a bit more detail on things that are tracking on this front next week.”

Also in the games sector, Frontier Developments PLC (AIM:FDEV) will announce final results, having recently announced that a board reshuffle, including founder David Braben moving aside to allow creative chief Jonny Watts to take the chief executive role.

Having started the year with a big stumble, after lower than expected sales of its Jurassic World Evolution 2 game and a delayed launch for the Warhammer real-time strategy game, June saw it announce record annual revenues of £114mln, up 26%.

The company said it expected group adjusted EBITDA to be in line with consensus at circa £7-8mln and that it was comfortable with current analyst expectations for the 2023 financial year.

Significant announcements scheduled for Wednesday

Interims: Alphawave IP Group PLC (LSE:AWE), City Pub Group PLC (AIM:CPC), Dianomi PLC (AIM:DNM), Hostmore PLC (LSE:MORE), Ingenta PLC (AIM:ING), Keywords Studios PLC (AIM:KWS, OTC:KYYWF), LBG Media Ltd, M&C Saatchi, MyHealthChecked PLC (AIM:MHC), Pendragon PLC, Pennant International Group PLC (AIM:PEN), Petershill Partners PLC (LSE:PHLL), S4 Capital PLC (LSE:SFOR), Ten Entertainment Group PLC (LSE:TEG), Warpaint London PLC (AIM:W7L)

Finals: Frontier Developments PLC (AIM:FDEV), Galliford Try Holdings PLC (LSE:LON:GFRD), Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF)

AGMs: Enteq Technologies PLC (AIM:NTQ), Hipgnosis Songs Fund Ltd, IG Group Holdings Plc (LSE:LON:IGG), India Capital Growth Fund Ltd (LSE:IGC), MERIT Group PLC, Odyssean Investment Trust PLC (LSE:OIT), SDI Group PLC (AIM:SDI), Seraphine Group PLC (LSE:BUMP), Tintra PLC (AIM:TNT)

Economic updates: Public Sector Net Borrowing (UK), MBA Mortgage Applications (US), Existing Home Sales (US), Crude Oil Inventories (US)

THURSDAY 22 SEPTEMBER

A day after the Fed, comes the Bank of England’s policy decision, which it delayed by a week after the death of the Queen.

The BoE has been overtaken by its former colonial counterpart, having started earlier in its hiking cycle and slowly reach a base rate of 1.75%, up from its starting point of 0.1%.

Bets by the market for September’s monetary policy committee decision have oscillated between whether another half-point hike to 2.25% on Thursday or a 75-basis-point move is more likely.

After the government’s announcement of an energy price cap, many feel the MPC’s urgency to hike has been reduced – but with the pound falling to a 37-year low on Friday will have worried the hawks on the committee, said economists at ING.

Many will also argue that the government’s support package could increase medium-term inflation given it reduces the risk of recession, which ING said means “it’s a close meeting to call, but if we’re right and the committee does move more cautiously than the Fed and ECB next week, then we expect another 50bp move in November”.

While the BoE has been hiking for six consecutive meetings, FTSE 100-listed Halma PLC (LSE:HLMA) has been hiking its dividend for 43 years straight, since 1979.

It provides a trading update on Thursday after its shares saw a rare period of turbulence recently in what, for years, has otherwise been a steady upward path.

In June, with its annual results, the acquisitive engineer and electronics group reported a "positive start to the new financial year" with a strong order book but also announced that its chief executive was stepping down after 18 years, inserting a potential bump in the road on what has been a pretty smooth path.

JD Sports Fashion PLC (LSE:JD.) is already a few steps further down the path, having ditched its boss and getting ready to report its first set of results under the stewardship of new chief executive Régis Schultz.

A strategy change does not seem like an immediate requirement for this blue-chip, which also has a very good track record under its former boss.

Will Schultz be tempted to tweak what has been the golden formula as the consumer squeeze tightens?

Another one to watch will be Playtech PLC (LSE:LON:PTEC), where interim results will be the first opportunity to communicate with shareholders after the long-running takeover process that ended in July when a Hong Kong consortium declined to make a bid.

On the day of the results, Playtech plans an in-depth presentation on Snaitech, its Italian B2C business, which broker Peel Hunt said is "a prime candidate for disposal once debt and equity market confidence recovers, if not before".

In July, Playtech said it expected first half EBITDA to be "more than €200m", which analysts said will ensure that the focus with the results is on current trading.

The broker concluded that it believes Playtech’s M&A story is "far from over".

Significant announcements scheduled for Thursday

Trading announcements: Halma PLC (LSE:HLMA)

Interims: Aquis Exchange Limited, Biome Technologies PLC (AIM:BIOM), Ceres Power Holdings PLC (AIM:CWR, OTC:CPWHF), Cineworld Group PLC (LSE:LON:CINE), Distribution Finance Capital Holdings PLC, Forward Partners Group PLC (AIM:FWD), JD Sports Fashion PLC (LSE:JD.), Judges Scientific PLC (AIM:JDG), Learning Technologies Group PLC (AIM:LTG), Life Science REIT, Osirium Technologies PLC (AIM:OSI), PensionBee Group PLC (LSE:PBEE), Playtech PLC (LSE:PTEC), Polymetal International PLC (LSE:POLY), PZ Cussons (LSE:LON:PZC) PLC, Safestyle UK PLC (AIM:SFE)

Finals: CVS Group (AIM:CVSG) PLC, Hansard Global (LSE:HSD) PLC, Wilmington PLC

AGMs: Begbies Traynor (AIM:LON:BEG) Group PLC, IG Design Group PLC (LSE:IGR), Trakm8 Holdings PLC (AIM:TRAK), Worsley Investors Limited

Ex-divs to reduce FTSE: 0.26 points (Hargreaves Lansdown)

Economic updates: BoE Interest Rate Decision (UK), Continuing Claims (US), Current Account (US), Initial Jobless Claims (US)

US earnings: Accenture (NYSE:NYSE:ACN), Costco (NASDAQ:NA:NASDAQ:COST) Wholesale, FedEx (NYSE:NYSE:FDX)

FRIDAY 23 SEPTEMBER

New chancellor of the exchequer Kwasi Kwarteng will deliver a mini-budget on Friday, according to reports, where he intends to set an official target of raising real GDP growth to 2.5% a year.

“One clear problem”, said analysts at Rabobank, “is that this aim has been met with a wall of scepticism.

“Not only do investors view the government’s chances of success in achieving this target as unlikely, but many commentators are also concerned that the new Tory cabinet’s desire to lower taxation is taking unnecessary chances with UK public finances.”

This emergency budget is also being billed as where Kwarteng and PM Truss will unveil their main weapons to supposedly stimulate this growth and to ease the cost-of-living squeeze: tax cuts for both consumers and businesses.

There have been whispers of reversing the planned hike to national insurance that came into effect in April as well as the increase of corporation tax from 19% to 25% next April.

Another possibility is that the Chancellor could also bring forward the 1p income tax cut that was earmarked by his predecessor, Rishi Sunak, for 2024, or raise the personal allowance.

“With productivity growth and labour force growth likely to remain subdued for some time, we suspect the economy’s potential growth rate will be closer to 1.0-1.5% in the 2020s than 2.5%,” said Capital Economics.

Among the company news should be results from Smiths Group (LSE:SMIN) PLC, which flagged up supply chain issues and the macroeconomic backdrop in its last trading statement.

As we enter the final quarter, macro uncertainty remains high and supply chain and inflationary challenges continue," said Paul Keel, the engineering conglomerate’s group chief executive.

Smiths said it was still on track for organic growth of 3%, but that looked a little bit like hedging its bets in case things did get tougher.

A better gauge of its mood might come from its share buyback plans.

The current £742mln programme is expected to complete early 2023 and it would be a good sign if the oil seals and component maker is confident enough to flag up more in the future.

Significant announcements scheduled for Friday

Trading announcements: Biffa PLC (LSE:BIFF), Investec PLC (LSE:INVP)

Finals: European Opportunities Trust PLC (LSE:JEO), Smiths Group PLC

AGMs: Accsys Technologies (AIM:AXS) PLC, Biffa PLC (LSE:BIFF), Bradda Head Lithium Ltd, Civitas Social Housing PLC (LSE:CSH), Fusion Antibodies Ltd, In The Style Group PLC (AIM:ITS), Safestay (AIM:SSTY) PLC, Speedy Hire PLC (LSE:SDY), Wise PLC (LSE:WISE)

Economic updates: GFK Consumer Confidence (UK)

Read more on Proactive Investors UK

Disclaimer

Mini-budget, BoE, Fed and a packed City diary ahead, including Haleon, Halma, JD, S4 and Playtech
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email