The Forward Look featuring GlaxoSmithkline, Severn Trent, Vodafone, Kingfisher and Imperial Tobacco

Nick Raynor, investment adviser at retail stockbroker, The Share Centre, gives his thoughts on what to expect from companies announcing results w/c 19 July 2010.

Tuesday

Severn Trent (LON:SVT) (first quarter update)

The share price has outperformed the market so far this year as investors look for safe havens in these volatile times. We are not expecting any surprises from what is perceived to be a defensive sector. We will be interested to see some post budget comment on future water demand. We currently list Severn Trent as a HOLD

Wednesday

Glaxosmithkline (LON:GSK) (second quarter results)

The market will be keen to hear news on its diabetes pill Avandia in connection with the Food and Drug Administration review in the US. There should also be further news on its future push into emerging markets, along with prospects for the existing and future products pipeline. We currently list GlaxoSmithKline as a BUY

Land Securities Group Plc (LON:LAND) (first quarter update)

The group recently surprised analysts with a sale of a development in Mayfair. The company may comment on plans for reinvesting the money, but of greater interest will be their thoughts on the property market and if the sale shows that demand for prime locations is set to remain high.  We currently list Land Securities as a HOLD

Thursday

Capita Group (LON:CPI) (interim results)

There have been increasing concerns over the support service sector since the budget announcement in June. Planned Government spending cuts are to be updated in October and this hangs over a number of companies, including Capita. Investors will be concentrating on the outlook statement with regard to outsourcing. Can the private sector help offset central government uncertainty? The figures themselves are likely to be inline with expectations. We currently list Capita as a HOLD

Imperial Tobacco Group (LON:IMT) (trading statement)

There have been a number of issues on the horizon that analysts’ have concerns over. These range from where profit growth can come from, pressure on margins, commodity costs and the effects of plain packaging. Any update or thoughts with regard to this will be of particular interest. We currently list Imperial Tobacco as a HOLD

Kingfisher (LON:KGF) (trading update)

Can Kingfisher lift the general gloom over the future confidence of the UK consumer? It is more likely the group will reiterate the cautious comments of others in the sector. There should also be more news of the group’s planned expansion of smaller stores into European cities and the likelihood of something similar for the UK. We currently list Kingfisher as a HOLD

Friday

United Utilities (LON:UU.) (interim trading statement)

Water utilities are regarded as being very predictable when it comes to trading updates, and investors should expect more of the same. There may be some news on the ongoing sell off of non core assets, but other than that we expect little to set the pulse racing. We currently list United Utilities as a HOLD.

Vodafone Group (LON:VOD) ( first quarter update)

There are three main areas for investors to concentrate on: the situation in Europe and chances of further recovery, their thoughts on the situation in India and comments on the holding in US based Verizon. There may also be news of potential sales of its holding in Poland. We currently list Vodafone as a BUY

Economic diary

Economic announcements for the week commencing 19 July 2010

Minutes of the Monetary Policy Committee meeting held on 7 and 8 July, 21 July

 Last month’s minutes revealed that the Bank of England’s unanimity over interest rates had been broken. Andrew Sentance voted for a rise in rates. He has since repeated his doubts over inflation, warning that spare capacity is not as great as previously thought. Inflation fell in June, but at 3.2% is still more than a full percentage point over target. Markets will pore over the latest minutes looking for a sign that the split has grown wider.

Gross Domestic Product: Preliminary Estimate – Q2 2010, 23 July

Today will see the release of the first estimate of GDP growth in Q2. Many economists have become cynical of ONS preliminary estimates, which are often changed significantly in subsequent data releases. The consensus is that growth in Q2 was faster than the first quarter’s growth rate of 0.3%, according to the National Accounts from the ONS. Most economists are expecting to see a growth rate in Q2 of around 0.5% to 0.6%. Today will provide the first official indication of whether these expectations are broadly right.

20 July

Producer Prices Indices – June 2010, ONS

Public Sector Statistics – Public Sector Finance, June 2010

Provisional Estimates of Broad Money (M4) and Credit (M4 Lending) June 2010, Bank of England

21 July

Minutes of the Monetary Policy Committee meeting held on 7 and 8 July, Bank of England

22 July

Retail Sales – June 2010, ONS

Eurozone Quarterly balance of payments, Eurostat

23 July

Gross Domestic Product: Preliminary Estimate – Q2 2010, ONS