Companies reporting next week
THE banking season continues, with results due from HSBC, Royal Bank of Scotland and Standard Chartered, while the insurance sector will also be in the spotlight, with half-year figures from Royal & Sun Alliance.
Banking giant HSBC's interim figures on Monday are expected to show a fall in profits to £3.4bn, from £3.6bn the same period last time. Analysts say the bank's bad debt charges should not outstrip volume growth.
Fund manager Gerrard said HSBC takes a traditionally cautious approach, which should mean it will emerge from any period of economic uncertainty intact.
Royal Bank of Scotland's half-year figures on Wednesday are expected to show impressive profits growth - up 16% to £3.2bn. Costs are expected to have risen, but will be dwarfed by a sharp rise in income, James Leal at Gerrard said.
Industrial gases group BOC reported a slide in half year figures in May after its semiconductor-related business was hurt by tough markets. But analysts are expecting third quarter results, to be released on Tuesday, to remain good.
Overall, when including the semiconductor impact and a drag from the weaker South African rand, profits are expected to drop to £110m from £114m.
London-based Standard Chartered bank is forecast to post a 19% decline in half-year profits on Wednesday, to $525m (£334m).
Jeremy Batstone at NatWest Stockbrokers said with heavy exposure to credit cards in Hong Kong - and hence bad debt - coupled to the region's tepid economic environment, growth is proving hard to come by. However outside Hong Kong, Standard Chartered - which operates mainly in Asia, with some operations in Middle East, Africa and Latin America - is expected to show good progress.
Investors will be keen to question insurer Royal & SunAlliance about whether it plans to launch a rights issue to raise cash - speculation has mounted that an £800m issue is imminent. Half-year operating profits, which strip out the effect of falling investments - its last full year results showed steep losses for this reason - are expected to show a 3.5% rise to £380m when it reports on Thursday.
Engineering and defence group GKN is expected to report a 37% decline in half-year profits to £90m when it reports on Friday, NatWest Stockbrokers predicts.
The decline will reflect weaker automotive production and weaker civil aerospace markets. The September 11 terrorist attacks in the US cast a shadow over civil aerospace markets, although analysts say the defence business looks more robust.
