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Week Ahead: a critical moment for Standard Chartered
We preview the main financial events in the coming week.
A string of London-listed companies will report numbers to the market in the coming days, and readings of global economic health are due, but a hearing to decide the fate of Standard Chartered (STAN.L) could prove the most compelling event on the week’s financial calendar.
Standard Chartered will appear before the New York State regulator on 15 August to defend its state licence in the wake of accusations that the bank was in breach of sanctions against Iran – claims the bank has vigorously disputed.
For many investors – for whom Standard has been a rare beacon of health among UK-based banks – the hearing is a key moment in deciding whether to stick with the shares. Retail investors have been furiously trading shares in the bank in the past few days, according to data from stockbrokers.
Standard Chartered’s fate is being decided at the back end of the corporate earnings season, both in the UK and globally.
On Monday oil and gas service provider Petrofac (PFC.L) reports results for the first half of the year. Michael Page International (MPI.L), the recruitment firm, will also update the market on its first-half results, which analysts expect to reflect the tough economic environment.
Insurer and asset manager Standard Life (SL.L) is the stand-out on Tuesday, as the company provides first-half results ahead of major regulatory changes for the sector, with the retail distribution review (RDR) and the start of auto-enrolment into pensions.
Tuesday also brings a flurry of economic data. In the UK, inflation numbers may show a small drop in the consumer prices index (CPI) closer to the Bank of England’s target, having dropped steadily since peaking last summer. Some economists, though, say there may be a temporary halt in the decline in CPI – which fell to 2.4% in June – due to rising university tuition fees and rising food prices.
Eurozone second-quarter GDP will also be published on Tuesday, likely showing a contraction, as well as individual readings for countries including Germany, which is expected to muster only a small growth figure.
Market-sensitive US retail sales numbers are also due.
Several blue chip companies report financials on Wednesday. First-half numbers are due from mining group ENRC (ENRC.L), which recently secured a new licence to operate a controversial mine in the Democratic Republic of Congo.
Resolution (RSL.L), the UK life-insurance consolidator that last month disappointed investors by ditching plans to dish out £250 million in a capital return, also publishes results on Wednesday.
Major economic data is due from both the UK and US on Wednesday. In the UK, the Bank of England publishes minutes from the latest monetary policy committee meeting, providing clues as to how close the nine-man panel is to launching even more economic stimulus, after extending their quantitative easing programme to £375 billion last month.
At the same time, data on the UK labour market – which has so far confounded economists for its relative strength compared to GDP data – is expected to show a slight improvement, with unemployment ticking down.
More important for global markets will be US manufacturing, industrial production and inflation data.
Thursday and Friday
The corporate calendar runs dry after Wednesday, with little economic data too. Weekly jobless claims and housing data from the US are due on Thursday, alongside euozone inflation numbers. In the UK, retail sales figures are due.
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
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Look up the shares
- Standard Chartered PLC (STAN.L)
- Standard Life PLC (SL.L)
- Petrofac Ltd (PFC.L)
- Michael Page International PLC (MPI.L)
- Resolution Ltd (RSL.L)
- Eurasian Natural Resources Corp PLC (ENRC.L)
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