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Week Ahead: Osborne to balance pre-election giveaways with populist taxes

Last updated: 05:30 15 Mar 2015 GMT, First published: 06:30 15 Mar 2015 GMT

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Corporate news flow takes a back seat to economic news, with George Osborne set to give his final Budget speech before May’s election.

Osborne is far too smooth a political operator to be caught blatantly bribing the electorate, especially as he has spent the last five years banging on about the need for most of us to tighten our belts, but he may have a bit of wiggle room to throw voters a bone or two, after raising some cash through selling down the government’s stake in Lloyds Banking.

Investec expects he will “defend his fiscal mettle” by delivering a broadly fiscally neutral year ahead plan, with giveaways funded by populist takeaways such as the ‘Google Tax’.

“Over the few months since the Autumn Statement (AS), the economic backdrop has shifted enough to have notable implications for the public finances. Upgraded growth, lower oil prices, other inflation savings and a further drop in gilt yields should give Mr Osborne one of the better Budget Day hands to play,” Investec predicted.

Also on Wednesday, and probably even more eagerly awaited by market watchers, is the US Federal Reserve’s policy making committee’s decision on interest rates or, more accurately, the wording surrounding its announcement.

The speculation centres on the continued use of the word “patient” in terms of the Fed’s willingness to end the prolonged period of abnormally low interest rates.

On the company results front, the week start quietly but not uninterestingly, with trading software specialist Brady catching the eye on Monday.

No surprises are expected, given the company indicated back in January that trading was in line with expectations, but a reminder of how well things appear to be going might not do any harm.

“Licence sales in the year were strong - 15 new contracts were inked in 2014 - despite challenging underlying market conditions. Encouragingly, the business has continued to spread its wings with deals in Korea, the Middle East (Cloud) and Monaco (Cloud),” noted Panmure Gordon.

“There was also a healthy spread of revenue from both new and existing customers. We expect this momentum to continue as Brady's trading and risk management solutions play into both trading volatility and increasing risk concerns within energy and commodities markets,” the broker said.

The press is likely to be all over Wednesday’s fourth quarter update from Sainsburys, especially as the supermarket has been losing market share, according to market research firm Kantar, which said the retailer’s share had slipped to 16.8% from 17% over the last 12 weeks.

Those pesky hard discounters are largely to blame for the erosion of share, so shareholders will be keen to see how Sainsburys own low-price offering, Netto, is faring.

The following day sees fashion retailer Next issue its fourth quarter results, with full-year pre-tax profits expected to come in at around £775mln.

“Recent sales data has suggested better trading at discount and luxury retailers so investors will be interested to see if that is reflected in Next’s results,” suggested Sheridan Admans, investment research manager at The Share Centre.

Significant announcements expected

Monday

Interims: PureCircle (LON:PURE)

Finals: Brady (LON:BRY), Frutarom Industries (LON:FRUT), Petards (LON:PEG), Smart Metering (LON:SMS), Tribal Group (LON:TRB)

Economic data: UK – Rightmove house price index; US – Industrial production, NAHB housing market index

Tuesday

Interims: Gfinity (LON:GFIN), Regenersis (LON:RGS)

Finals: Antofagasta (LON:ANTO), French Connection (LON:FCCN), Gem Diamonds (LON:GEMD), Good Energy Group (LON:GOOD), Just Eat (LON:JE.), KBC Advanced Technologies (LON:KBC), Mears Group PLC (MER), Pennant International Group PLC (PEN), Safecharge International Group (SCH), WANdisco (WAND), Zotefoams PLC (ZTF)

Trading statements: IG Group (LON:IGG), Sainsbury (J) (LON:SBRY)

Economic data: EU – New car registrations; Eurozone employment; Eurozone consumer prices; Eurozone economic sentiment. US – Housing starts; Building permits

Wednesday

Interims: Smiths Group (LON:SMIN)

Finals: accesso Technology Group (ACSO), Burford Capital Ltd (BUR), Cape (CIU), Hochschild Mining PLC (HOC), Stilo International Plc (STL), UTV Media plc (UTV)

Trading statement: Imagination Technologies (LON:IMG)

Economic data: UK – Budget speech; Unemployment; Earnings; Bank of England minutes from March meeting. EU – Trade balance. US – Department of Energy crude oil inventories; FOMC interest rate decision

Thursday

Finals: EMIS Group PLC (EMIS), EnQuest Plc (ENQ), Lamprell PLC (LAM), Next Plc (NXT), Ophir Energy (OPHR), Premier Farnell PLC (PFL), Savills PLC (SVS), Ted Baker Plc (TED). Xaar PLC (XAR)

The following widely-held stocks go ex-div on Thursday: Standard Chartered, Low & Bonar

Economic data: EU – ECB monthly bulletin. US – Current account balance; Weekly jobless claims; Philadelphia Fed; Leading indicators

Friday

Interims: CVS Group (LON:CVSG)

Finals: Gamma Communications (GAMA), JKX Oil & Gas PLC (JKX)

Trading statements: Berkeley Group Holdings (The) PLC (BKG), Investec (INVR)

Economic data: UK – CBI trends; Public finances.

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