Wednesday preview: China activity data and Prudential in the spotlight
By Alexander Bueso
Date: Tuesday 13 Aug 2019
(Sharecast News) - The focus on Wednesday will continue to be firmly on the People's Republic of China where a barrage of first-tier economic data is set for release, including readings for industrial production, retail sales and fixed asset investment in July.
Investors are also likely to be scanning the news headlines for any new information regarding Washington's surprise decision, on the day before, to dial back on some of its trade tariff threats against Chinese exports.
Against that backdrop, at 0930 BST the Office for National Statistics will publish its consumer price report for July.
The consensus is for a slight dip in the year-on-year rate of increase in CPI from 2.0% for June to 1.9% last month.
To take note of, any downside surprise would mean that in real terms, wage growth in the UK was rising even more quickly, thus possibly adding to some analysts' arguments that financial markets had gone too far in pricing-in interest rate cuts.
Across the Channel, the spotlight was expected to be on a reading for German second quarter gross domestic product.
Finally, in the US, import price data for July might also make for an interesting read.
On the corporate side of things and for Prudential's interims, Deutsche Bank analyst Oliver Steel was forecasting 7.0% growth in underlying earnings net of lower positive exceptionals and a tailwind from foreign exchange, driven by mid-teens profit growth in Asia against flat earnings elsewhere.
Nevertheless, due to slowing sales and a relatively low overall rate of growth, Steel did not expect the financial heavyweight's interims to act as a catalyst for the share price, although the rising contribution from Asia did argue in favour of a higher price-to-earnings multiple.
Steel's estimate for Prudential's exceptionals for the front half of 2019 was £197.0m, which was down from £248.0m one year ago.
Taking into account the partial sale of Prudential's UK annuity book, Steel pegged the rate of growth in underlying profits at 11.0% with FX adding four percentage points to the rate of growth.
Wednesday August 14
INTERIMS
Admiral Group, Apax Global Alpha Limited , Apax Global Alpha Limited , Avast, Balfour Beatty, Bank of Georgia Group, Georgia Healthcare Group, IndigoVision Group, Lookers, Network International Holdings, Prudential, Societatea Energetica Electrica SA GDR (Reg S), Touchstone Exploration Inc NPV (DI)
INTERIM DIVIDEND PAYMENT DATE
Shoe Zone
INTERIM EX-DIVIDEND DATE
TI Fluid Systems
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
GDP (Preliminary) (EU) (10:00)
GDP (Preliminary) (GER) (07:00)
Industrial Production (EU) (10:00)
Q2
Bank of Georgia Group, Georgia Healthcare Group
AGMS
Creightons, Gore Street Energy Storage Fund , John Laing Environmental Assets Group Limited , New Century AIM VCT, Triad Group
UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Producer Price Index (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Halma, National Grid
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