A big week expected for the banks as half year results are rolled out

August 3rd, 2009 by admin | Filed under Daily News, Money Management, UK Bank Accounts, UK Banks.

banking It’s going to be a big week for the banks as the major banks begin to release their half year results. First today will be Barclays and HSBC, both of whom managed to avoid government intervention. Barclays are expected to announce profits of around £4 billion before taxes and HSBC are expected to have fared slightly less well with profits of around £3 billion, with this figure being inflated by a number of one-off gains.

Lloyds Banking Group will be releasing their figures later in the week and they are expected to be less than encouraging, with losses of over £5 billion.
Last on the list will be RBS who are expected to announce that they have more or less broken even on the half years trading, which a remarkable achievement is considering that they made the UK’s biggest corporate loss in history of £24 billion for 2008

Other predictions announced over the weekend , was that, pro rata, the budget deficits in both the U.S. and U.K. will be the largest of the world’s top 20 advanced and emerging economies in 2009. A report from the International Monetary Fund (IMF) also suggested that clear plans to cut spending are needed to ease investor concerns.
The U.K.’s budget gap will be 11.6 percent of the country’s economy and that of U.S. budget gap will be 13.5 percent. The IMF estimated that
U.S. government debt next year will almost match the size of their economy.

The Bibby Line Group, which owns 51 per cent of Costcutter, has made an unsuccessful takeover bid for Nisa-Today’s, who is Europe’s largest independent buying group. The bid, estimated to have between 50 and 75 million pounds, was rejected because Nisa’s board reckoned it to be a major undervaluation of the company.

Another potential takeover, that between TV broadcaster Five and ITV seems a little more likely, even though ITV is currently in the process of replacing their CEO. Of the several candidates for the ITV position being muted, each are reported to be in favour of the takeover.

The Waitrose supermarket group is to market sister company John Lewis’s kitchen and home-ware products through their website and as well as in eighteen of its leading stores. Analysts are predicting that Waitrose will announce a growth of sales running higher than ten percent for the half year period, largely driven by increased demand for the company’s essential’s range of products, that now account for 16 per cent of the company’s sales

On the FTSE yesterday there were half year results a plenty. Shares in Anglo-Dutch computer-services provider Logica Plc rallied by 8.3 percent, to 101.25 pence, making for a fourth day of rises after analysts announce that the shares were undervalued. .
Rank Group Plc the U.K.’s second-largest casino owner also saw a rise in value for their shares, by a commendable 11 percent, to 77.75 pence after the company reported a profit of 19.5 million pounds for the half year to June 30.
Rentokil Initial Plc also produced positive results causing their shares to rise 7.2 percent to 97pence. The company, the world’s largest pest-control company announced that losses in their City Link parcel-delivery unit will be lower than expected at 12 million pounds.

Publisher of Information Week Business Media Plc saw their shares jump 14 percent, to 424.25 pence after they announced that they will be increasing their dividend to 6 pence per share, higher than predicted.

Shares in Anglo American plc fell by 0.1% to 1,902.50 pence on the news that first-half revenues fell 38% from £17.9 billion a year ago to £11.1 in 2009. Net profit for the first-half also fell 30.6% to £2.97 billion.

Engineering firm Balfour Beatty plc saw their shares climb 0.8% to 309.50 pence after the announcement that subsidiary company Gammon Construction have been awarded a HK$3.76 billion (£300 million) contract by the Hong Kong Government for the construction of a sewage conveyance system.

Despite the announcement that their first quarter revenues had fallen by 12.2% to £1.98 billion from the same period last year, shares in British Airways Plc added 5.5% to 141.80 pence.

Shares in insurance brokers Jardine Lloyd Thompson Group plc were also on the rise, but by a modest 0.4% to 443.25 pence. The increase came on the announcement that the company’s first-half net profit had risen by 14.6% to £42.5 million.

Brewing giant SABMiller plc suffered a 1.1% drop in share value to 1,381.00 pence after they announced that beer sales were lower than hoped for the first six months of 2009, while soft drinks volumes climbed 2%.

Travel group Travelzest plc added 8.3% to 19.50 after returning to profitability in the first half of the year, due to strong sales growth in Canada and UK.

United Business Media Limited surged 12.3% to 417.00 pence despite a net profit fall of 19.6% to £51.3 million for the first-half.

All in all July was a great month for the FTSE 100, recording its largest monthly gain since April 2003.

On Friday, the FTSE 100 slipped back a little, down 23.25 points to close on 4,608.36. The FTSE 250 however continued to make considerable gains before closing for the weekend, rising a further 65.53 points to close on 7999.96. The guide has risen almost 800 points in the last three weeks.

The pound rose against the dollar for a fifth month amid signs the U.K. economy may be emerging from the worst recession since World War II.
The U.K. currency also gained in the week on Friday’s announcement that UK consumer confidence was at a 15-month high. In 2008, sterling depreciated 26 percent against the dollar and 23 percent against the Euro.

Sterling continued to gain ground rising against the dollar and the Euro.
Pound/US dollar 1.671
Pound/Euro 1.1726
Pound/Japanese Yen 158.1871
Pound/Swiss Franc 1.785

US President Barack Obama continues to wax lyrical on the current state of the US economy. His latest proclamation has said that new figures on the American economy indicate progress is being made in tackling the country’s problems.
In true terms, US government figures have shown that the economy shrank at an annual pace of 1% in the April-to-June quarter,
Whilst the figures were better than expected, they still marked the longest period of decline in the US economy since records began in 1947.

On Wall Street Friday the Dow Jones had a subdued days trading, up 17.15 to 9171.61. The NASDAQ dropped a mere 5.8 points to shut up shop for the weekend on 1978.53

There were a few raised eyebrows around with the announcement that two of the banks that succeeded in making losses totaling almost $28 billion in 2008 still paid out more million-dollar bonuses than any of their rivals. Citigroup and Merrill Lynch, also recipients of US government hand out also made millionaires of their hundreds of their employees.