GG now spends rainy days trading equities and currencies. He likes to use a combination of technical analysis and news flow to make trading decisions.
HBOS and BSkyB
Economic releases and the outcome of the Fed meeting on Wednesday are likely to dominate proceedings this week, despite there being a full diary of company results too.
Out of the corporate traps on Tuesday will be HBOS where a potential £4bn rights issue was the focus of much media speculation over the weekend. After the RBS ‘dash for cash’ last week, it would hardly be surprising if some of the UK’s other lenders came forward with the begging bowl.
HBOS, which already has one of the more stretched balance sheets and is the UK’s largest mortgage lender may have more need than some-though a £9bn credit deal designed to take advantage of the Bank of England’s ‘free-up the money market’ package last week alleviates some of the immediate pressure.
Estimates of write-downs could total £3bn this time, given the downward revaluation that RBS has just taken on ‘Alt-A’ securities-and the fact that HBOS chose to write-off the piffling amount of £227m last time. However, eyes will be focused on what the group has to say about the prospects for the UK mortgage market, given their leading role.
On Wednesday broadcaster BSkyB is set to release Q3 results. Much speculation has recently centred on the 17.9% stake that it holds in ITV, which the Government ruled was anti-competitive and wants reduced to below 7.5%.
Although Sky has appealed against that ruling, it is believed that expressions of interest for the stake have come from a number of sources, including European broadcaster RTL.
Whether BSkyB can extricate themselves from the stake with a profit remains to be seen; the price of ITV shares has fallen some 40% since Murdoch’s outfit paid about £940m for the ITV stake in order to block Mr. Branson’s takeover ambitions.
Analysts are looking for net customer additions of around 57,000 in the 3 months to March, on sales of £1.25bn and operating profits of about £210m.
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April 29th, 2008 at 9:08 am
Nothing beats a good leak to a Sunday newspaper for expectations management!
£4bn rights issue-but also reducing the dividend payout ratio to 40% of earnings, having recently (aug last year) said they would jack it up. Nice U-turn!
Also paying h1 dividend in shares rather than cash
Writedowns of £2.8bn in line with the well informed article.
No real surprises-stock off 7p-just over 1%
April 30th, 2008 at 7:57 am
Sky turned in net customer adds of 56,000, sales of £1.25bn and operating profit of £209m, all of which are pretty close to estimates.
They wrote down the ITV stake by what looks to be £474m, and claim that ‘churn’ (the number of customers switching off) is at its lowest level for 4years at just over 10%. ARPU (average revenue per user) climbed a £1 to £424.
Stock up 2.5% or 15p on the back of some relief that despite a difficult consumer environment sales churn rates and Arpu all moving in the right directions.