Tuesday preview: UK jobs data, US CPI eyed as Derwent and Entain report

(Sharecast News) - Tuesday will see the release of interim results from Derwent London, Ladbrokes owner Entain and PageGroup, and a trading update from housebuilder Bellway, while macro calendar highlights will be UK jobs data and the latest US inflation print. As far as Derwent is concerned, broker Shore Capital said it expects growing leasing momentum and a bright outlook.

Analyst Andrew Saunders said Shore expects Derwent to highlight continued momentum in leasing and ERV growth, with the central London office market seeing strong occupational demand against an ongoing backdrop of low supply.

"Larger occupiers are planning further ahead than ever before as the medium-term pipeline is squeezed creating sustained rental tension. We believe there will be a continued improvement in the occupier picture in the West End as vacancy here remains very low at circa 4.5% versus long-term average of 4.1% while take-up of space increases," said Saunders.

"In meeting this increased demand, a new supply of highly sustainable and desirable workplaces is being delivered into the market. This is driving an improvement in rental tone - with ERV's and pre-let rents increasingly exceeding expectations leading Derwent London to reiterate its bullish ERV guidance for FY25F of between 3-6%.

"In the West End, prime yields have recently stabilised (at 4.0%) for the first time since 2021 given the expectation of improving ERV's and interest rate cuts. We expect the market has now reached an inflexion point wall with international capital expected to see progressive redeployment given the relative historic value and expectation of rising valuations and increasing NTAs.

"We believe that Derwent London looks to be one of the best placed listed-operators to benefit from the recovery in West End offices and we like its award-winning, design-led development pipeline north of Oxford St.

"While the outlook for earnings is expected to remain broadly flat in FY25F and FY26F as rising interest costs offset higher rents, the longer-term outlook remains bright."

On the macro front, XTB research director Kathleen Brooks said the UK jobs data is expected to show more weakness creeping into the economy, which is unlikely to abate until after the Budget in late October/early November.

"There are growing signs that the UK labour market is coming under pressure, especially the private sector," she said.

"The latest survey data from the Chartered Institute of Personnel and Development reported that hiring intensions in the private sector are at a record low, with only 57% of private sector firms planning on recruiting in the next three months, down from 65% a year ago. This comes as businesses are worried about potential tax hikes in the autumn budget, and young people are hit the hardest. Other survey data from KPMG found that hiring fell sharply last month, with the steepest decline in vacancies since April. This is also hitting starting salaries, which are rising at their weakest rate in 4.5 years.

"There are concerns that the upcoming Employment Rights Bill could hit the private sector hard and erode hiring intensions even further. Thus, Tuesday's hard labour market data from the ONS is worth watching closely. It is expected to show a further cooling in the labour market and stagnation in private sector wage growth, as the gap between public sector and private sector pay growth is expected to continue to widen.

"The unemployment rate is expected to remain steady at 4.7%, while public sector wage growth is expected to come in at 5% for the three months to July, with private sector wage growth at 4.8%. Jobs growth is also under the spotlight, as jobs have been shed at a rapid pace in recent months. This is expected to continue, although the pace of job losses could slow."

In the US, the CPI report for July is expected to show a moderate rate of price growth, with the headline month-on-month rate seen expanding by 0.2% and the core rate expected to rise by 0.3%.

"The annual rate for headline CPI is expected to inch up to 2.8% from 2.7% in June, while the core rate is expected to rise to 3% from 2.9%," said Brooks.

Tuesday August 12

INTERIMS

Atalaya Mining Copper, S.A. (CDI), Derwent London, Entain, Genuit Group, Pagegroup, Xaar

INTERIM DIVIDEND PAYMENT DATE

Unicorn AIM VCT

QUARTERLY PAYMENT DATE

BlackRock Latin American Inv Trust

QUARTERLY EX-DIVIDEND DATE

Seplat Energy (DI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Consumer Price Index (US) (13:30)

Current Account (GER) (13:30)

ZEW Survey (EU) - Economic Sentiment (10:00)

ZEW Survey (GER) - Current Situation (10:00)

ZEW Survey (GER) - Economic Sentiment (10:00)

Q2

Atalaya Mining Copper, S.A. (CDI)

FINALS

Zoo Digital Group

SPECIAL EX-DIVIDEND DATE

Assura

AGMS

Metir, Silver Bullet Data Services Group

TRADING ANNOUNCEMENTS

Bellway

UK ECONOMIC ANNOUNCEMENTS

Claimant Count Rate (07:00)

FINAL DIVIDEND PAYMENT DATE

Touchstar