Thursday preview: OPEC meeting, Victrex in focus
By Alexander Bueso
Date: Wednesday 04 Dec 2019
(Sharecast News) - The market focus on Thursday will be on the first of two days of meetings between energy ministers of the Organisation of the Petroleum Exporting Countries member states.
Analysts at Capital Economics forecast that the cartel and allied producers will only agree to roll-over their existing production curbs due to Saudi balking at the risk of seeing its share of the global oil market being eroded further by 'free riders'.
"If we are right and OPEC+ simply rolls over its current agreement, there could be a fall in the price of oil. That said, the weakness would probably be short-lived," Capital Economics's Franziska Palmas said in a research report sent to clients.
"In fact, we expect global economic growth to gradually recover next year and US supply growth to slow sharply, which means current OPEC+ supply cuts should be enough to support a slight recovery in the price of oil next year."
In other key data releases for the session, German factory orders figures for October are due to be released at 0700 GMT, followed by similar data out of the US at 1500 GMT and a reading on America's foreign trade balance in October at 1330 GMT.
Among the handful of corporates that are set to update financial markets on Thursday is Victrex.
For the advanced polymers manufacturer's full-year results, the analyst consensus is anticipating a 14.0% drop in volumes for profits before tax of £106.0m, earnings per share of 108.0p and a dividend per share of 61.0p.
For UBS's Andrew Stott, investor focus will be on potential positives in 2020 such as the restocking in automotive supply chains, possibly offset by negatives like declining capital expenditures on oil and gas.
To take note of, in a research note sent to clients, Stott pointed out how a stronger pound might reduce leverage to a recovery in volumes in 2020 and 2021 - despite hedging.
Stott also said that he would be looking for any comments regarding Victrex's plans for capex (he'd penciled in £35.0m per year for the next two years) and on the potential for special dividends.
The UBS analyst however was only anticipating a 2019 DPS of 54.0p, against a consensus forecast for 61.0p.
"The stock is trading on 20x PE, a 20% premium to the long-term average but towards (or at) the bottom of the volume cycle. We retain our Neutral rating."
Thursday December 05
INTERIM DIVIDEND PAYMENT DATE
Burford Capital , First Derivatives, NB Distressed Debt Investment Fund Limited Ext Shs, Seplat Petroleum Development Company (DI)
INTERIM EX-DIVIDEND DATE
Aquila Services Group, Atlantis Japan Growth Fund Ltd., Babcock International Group, Big Yellow Group, Brickability Group , Caffyns, Cake Box Holdings, Caledonia Investments, D4T4 Solutions, Gresham House Strategic , Halfords Group, Homeserve, IG Design Group, Intermediate Capital Group, Investec, Mediclinic International , Michelmersh Brick Holdings, Montanaro European Smaller Companies Trust, Next, PayPoint, Pets at Home Group , Record, Redcentric, Royal Mail, SDCL Energy Efficiency Income Trust, Speedy Hire, Templeton Emerging Markets Inv Trust, TR Property Inv Trust, Vertu Motors, Walker Crips Group, Wincanton
QUARTERLY EX-DIVIDEND DATE
Honeycomb Investment Trust, Raven Property Group 6.5% Red Cnv Pref Shs NPV, RM Secured Direct Lending, UIL Limited (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (US) (13:30)
Continuing Claims (US) (13:30)
Factory Orders (GER) (07:00)
Factory Orders (US) (15:00)
Gross Domestic Product (EU) (10:00)
Initial Jobless Claims (US) (13:30)
Retail Sales (EU) (10:00)
FINALS
Daily Mail and General Trust A (Non.V), Victrex plc
SPECIAL EX-DIVIDEND DATE
Fidelity Special Values, RDL Realisation , RM Secured Direct Lending
AGMS
Alternative Liquidity Fund Limited, Baillie Gifford Japan Trust, BATM Advanced Communications Ltd., BlackRock Greater Europe Inv Trust, Henderson International Income Trust, Kin and Carta , MJ Gleeson , Nanoco Group, Plexus Holdings, Ruffer Investment Company Ltd Red PTG Pref Shares, Sabien Technology Group, Softcat, VinaCapital Vietnam Opportunity Fund Ltd.
TRADING ANNOUNCEMENTS
Daily Mail and General Trust A (Non.V), IG Group Holdings, Joules Group
FINAL DIVIDEND PAYMENT DATE
NWF Group
FINAL EX-DIVIDEND DATE
Aeci 5 1/2% Prf, AVI Global Trust , Aviva 8 3/4% Cumulative Irrd Preference 1, Britvic, DFS Furniture, Fidelity Special Values, General Accident 'A', Scottish Oriental Smaller Companies Trust, Smart (J) & Co., Town Centre Securities, YouGov
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