The week ahead in business and finance

Monday

Global miner BHP Billiton reports its eagerly-awaited full-year results with activist investor Elliott Advisors’ 5pc stake still hanging over management’s head. The company’s less profitable oil and gas division will be under the spotlight with the Paul Singer-led hedge fund placing spinning out its lagging oil portfolio as a top priority to turn around the company.

With oil prices rebounding less strongly than other commodities, the gap in profitability could be laid bare in the latest results. Rio Tinto’s strong first-half results and boosted dividend payout will be the obvious comparable for investors, with expectations that BHP will also reward shareholders.

Tuesday

All eyes will be on Persimmon to see if the housebuilder has continued the sector’s string of expectation-beating results.  Last month’s exceptional trading update in the face of election uncertainty was given a helping hand by the continued strong demand from first-time buyers.

With interest rates low and the Help to Buy scheme supporting a solid chunk of house sales, strong momentum should have been maintained.  

Persimmon said that revenue grew by 12pc in the first half of the year to £1.66bn with higher volumes and average selling prices supporting the growth.

“If there is to be a spanner thrown into the works, it will likely come from the group’s comment around current conditions, which are looking slightly more precarious,” commented Hargreaves Lansdown analyst Danny Cox.  

Wednesday

Construction giant Carillion has already warned shareholders to expect a disastrous showing in its latest interim results with its share price crashing 70pc in a matter of days following a profit warning last month. Hedge funds cashed-in from betting against the heavily shorted stock with an incredible share price slide stretching over three days caused by the company axing its dividend and parting company with its chief executive.

Shareholders did, however, cheer the firm being awarded one of the HS2 rail line construction contracts just days after the shock profit warning. Carillion said ahead of its results that it would be booking a huge £845m provision to cover contracts which have soured and warned that full-year revenue would be between £4.6bn and £5bn lower than expected, citing “difficult markets and exits from certain territories” as factors for the huge downgrade.

Reaction was muted last Friday to news that Richard Howson, who stepped down as chief executive following the profit warning, would be taking on the role of chief operating officer to help the turnaround but Wednesday’s results will give management the opportunity to set out its stall on the company’s future.

Thursday

Premier Oil’s star Zama discovery in the Gulf of Mexico will be in the limelight on Thursday with full-year guidance upgrades expected from the firm. Premier said that the “world class” find in July at its block off the coast of Mexico could produce up to 2bn barrels of oil with shares rocketing 35pc as a result.

Peel Hunt analyst James Carmichael argued ahead of its latest interim results that in addition to upgrades on earnings, production should remain above guidance but that net debt remains a focus.  Premier agreed a long-awaited deal in February to secure a $4bn debt facility over the next four years to help the explorer fund the development of projects. 

Economic week ahead

While the usual batch of economic readings will continue to stir the currency markets, annual Jackson Hole central bank conference in the US this weekend will undoubtedly take centre stage for investors across the globe.

Reports suggest that the European Central Bank’s president Mario Draghi will not use the conference to signal a long-awaited shift in monetary policy as first thought.

But with expectations that the central bank will soon unwind its quantitative easing programme as the eurozone recovery goes from strength to strength, the markets will still be hanging on to his every word.

US Federal Reserve chair Janet Yellen will also be under the spotlight at the conference in Wyoming with investors hunting for any clues over whether the central bank will hike interest rates once more this year.

Her appearance has taken extra significance after the minutes from the latest Fed meeting showed increasing division at the central bank over whether weak inflation should delay a rate hike.