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Hong Kong loan growth, US interest rate rises expected to lift Standard Chartered profit

Last updated: 06:00 02 May 2018 BST, First published: 12:30 01 May 2018 BST

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Emerging markets-focused lender Standard Chartered PLC (LON:STAN) is expected to report an increase in profits and revenues in the first quarter, boosted by loan growth in Hong Kong and US interest rate hikes.

Morgan Stanley estimates the FTSE 100-listed firm posting adjusted profits of US$1.22bn, compared to US$1.02bn the same period a year earlier.  Revenue is forecast to rise to US$3.91bn from US$3.61bn.

The US broker predicts Standard Chartered’s operating costs of US$2.5bn, up from US$2.38bn last year, but thinks impairments should “remain contained” at US$250mln.

Fed decision seen steady

The US Federal Reserve is expected to leave headline interest rates unchanged in the target range of 1.50%-1.75% following its latest policy meeting which ends on Wednesday.

New Fed chairman Jay Powel is however expected to lay the groundwork for a second 0.25% hike of the year in June - and the seventh increase of this upcycle - and a third later in the year.

Some analysts continue to wonder whether the Fed will sanction a fourth increase this year or even a half-point rise

Just as importantly the Fed is expected to persist with Quantitative Tightening as the US central bank shrinks it balance sheet by US$30bn a month this quarter, US$40bn a month from July and US $50bn a month from September.

Early sales patterns eyed at Indivior

First quarter results from Indivior PLC (LON:INDV) due on Wednesday to keep the pharmaceutical company’s North American investors sweet.

The update comes less than two weeks after the FTSE 250-listed firm filed a new drug submission for its SUBLOCADE treatment for severe opioid use disorder with Health Canada’s Therapeutics Drugs Directorate.

The US launch was scheduled for the week of February 26, so the statement may contain an update on early sales patterns. The board has warned the market that revenues are expected to be “relatively modest” in the early stages of launch.

Jefferies is predicting peak sales of SUBLOCADE of US$2bn a year following a proprietary survey.

For the full-year, Indivior has issued guidance for net revenue of US$1,130mln-$1,170mln and net income in a range of US$290mln-$320mln, excluding exceptional items and at constant FX.

 

Significant events expected on Wednesday May 2:

US interest rate decision

Trading updates: Next Plc (LON:NXT), Standard Chartered PLC (Q1) (LON:STAN), Paddy Power Betfair plc (LON:PPB), Direct Line Insurance Group PLC (LON:DLG), ConvaTec Group PLC (LON:CTEC), Accsys Technologies PLC (LON:AXS), Howden Joinery Group PLC (LON:HWDN), IWG PLC (LON:IWG), PPHE Hotel Group PLC (LON:PPH)

Interims: Avon Rubber PLC (LON:AVON), Indivior PLC (Q1) (LON:INDV), Inmarsat Plc (Q1) (LON:ISAT), Sage Group PLC (LON:SGE)

Economic data: UK construction PMI; EU Q1 GDP; US ADP employment report

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