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The week ahead: Insurers and banks hog the spotlight

Published: 02:01 03 Aug 2014 EDT

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Another busy week is in store, with insurance companies to the fore.

Getting the ball rolling on Monday is esure, and if Friday's results from Direct Line are anything to go by, the company is likely to report that the motor insurance market remains fiercely competitive.

JP Morgan predicts a flat first half post-tax profit of £43mln but a 9% decline in trading profit, which includes around of £4mln of flood losses.

The broker tips an interim dividend of 4.9 pence per share (pps).

"We expect esure to continue to balance growth vs capital returns depending on the development of the UK Motor rate cycle," JP Morgan said.

"Despite some signs of stabilising rates in Q2, rates continue to overshoot claims inflation benefits in Q2’14e. New business rates are down a 10% since the start of the year, with Q2 weakening 3% q-on-q vs -7% in Q1,"2 it added.

South African insurer Old Mutual reports in sterling so the 25% depreciation in the average rand exchange rate makes earnings growth highly unlikely, according to Investec.

"We are forecasting a contraction in adjusted operating profit from 9.2pps to 8.6pps (-7%). The wealth business should demonstrate that it is on track to achieve its operating profit target for FY2015 and we are expecting some communication in respect of the company’s plans for the proceeds from the partial IPO of US asset management.

Elsewhere in the financial sector, emerging markets-focused banking groups HSBC and Standard Chartered also report.

Retail stockbroker The Share Centre rates Standard Chartered a 'hold' and says investors will be hoping that the relentless flow of bad news from the group over the last 16 months shows some signs of abating.

"Management has been under pressure which has led to a strategic review. The group is unlikely to point to any significant change in the situation it may find itself in. Holders of the shares will have much to focus on such as trading conditions in Asia, bad loans, currencies, regulatory costs and individual country performance," the Share Centre said.

The Share Centre's parent company, Share plc, releases its own results on Tuesday.

On the economic front, Thursday's meeting of the Monetary Policy Committee will doubtless be subject to speculation about the timing of the inevitable interest rate increase from the Bank of England.

The general view, however, is that August is too soon for a rate rise, especially in view of the continued strength of sterling.

Significant announcements expected

Monday

Companies: Interims: Alent (LON:ALNT), esure (LON:ESUR), Fidessa (LON:FDSA), HSBC Holdings (LON:HSBA), Intertek (LON:ITRK), Keller (LON:KLR), Telecity (LON:TCY), Senior (LON:SNR), Ultra Electronics (LON:ULE)

Economic: UK: PMI Construction

Tuesday

Companies: Interims: Aggreko (LON:AGK), Avocet (LON:AVM), Clarke (T) (LON:CTO), Dragon Oil (LON:DGO), Fresnillo (LON:FRES), Genel Energy (LON:GENL), Hill & Smith (LON:HILS), Inmarsat (LON:ISAT), InterContinental Hotels (LON:IHG), LSL Property Services (LON:LSL), Meggitt (LON:MGGT), Novae Group (LON:NVA), Rotork (LON:ROR), Standard Life (LON:SL.), Vernalis (LON:VER), Rex Bionics (LON:RXB), SDL (LON:SDL), Share (LON:SHRE). Final: NWF Group (LON:NWF). Trading statement: 888 (LON:888)

Economic: EU: Markit Services PMI. Retail Sales. UK: BRC Shop Price Index. Markit Services PMI. US: Markit Services PMI. Factory Orders. ISM Non-manufacturing

Wednesday

Companies: Interims: Ferrexpo (LON:FXPO), Friends Life (LON:FLG), GW Pharmaceuticals (LON:GWP), Interserve (LON:IRV), Johnston Press (LON:JPR), Legal & General (LON:LGEN), Standard Chartered (LON:STAN), StatPro (LON:SOG). Trading statement: Grainger (LON:GRI)

The following widely held stocks will be trading in ex-dividend form: QinetiQ, Pennon.

Economic: UK: Halifax House Price Index. Industrial Production. NIESR GDP Estimate. US: Trade Balance.

Thursday

Companies: Interims: AMEC (LON:AMEC), Aviva (LON:AV.), BATM Advanced Communications (LON:BVC), Cobham (LON:COB), Coca-Cola HBC (LON:CCH), Kennedy Wilson (LON:KWE), Mondi (LON:MNDI), Old Mutual (LON:OML),Randgold Resources (LON:RRS), Rio Tinto (LON:RIO), RSA Insurance (LON:RSA), Spirax-Sarco Engineering (LON:SPX). Trading statements: Enterprise Inns (LON:ETI), Hardy Oil & Gas (LON:HDY), Infinis (LON:INFI), UDG Healthcare (LON:UDG)

Economic: UK: BoE Interest Rate. EU: ECB Interest Rate. US: Jobless Claims. Consumer Credit.

Friday

Companies: Catlin (LON:CGL). Trading statement: Bellway (LON:BWY)

Economic: UK: Trade Balance.

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