Weekly Outlook: Prudential and Centamin full-year results

Sponsored by iShares

Ready to rethink your portfolio? Putting cash to work with bond ETFs

15 March 2024

|

Hannah Williford

Monday 18 March

Full-year results from Marshalls
Rightmove UK house price index
Chinese retail sales, industrial production and fixed asset investment growth
EU inflation
US NAHB housing industry survey
In the US, quarterly results from Abcam

Tuesday 19 March

Full-year results from Sabre Insurance, Essentra, Diversified Energy, Midwich, Harworth and Zotefoams
First-half results from DFS Furniture and Close Brothers
Trading statement from SThree
Bank of Japan monetary policy decision
Reserve Bank of Australia monetary policy decision
German ZEW economic sentiment survey
US building permits
US new housing starts
In Asia, quarterly results from Xiaomi, China Unicom and Tencent Entertainment

Wednesday 20 March

Full-year results from Computacenter
UK inflation
EU consumer confidence survey
US Federal Reserve monetary policy decision
US oil inventories
In Asia, quarterly results from Tencent, Geely Automobile
In the US, quarterly results from Micron, General Mills, BioNTech and Chewy
Prudential full-year results

Prudential will produce its full-year results on Wednesday after a year where its share price slipped by almost a third.

While Hong Kong was Prudential’s most profitable market in 2022, both Hong Kong and China have struggled to stimulate their economies after the COVID lockdown, causing issues for the company. Now Prudential looks to India, Vietnam, Thailand, Taiwan and Philippines as “high growth markets”.

AJ Bell trio Russ Mould, investment director, Danni Hewson, head of financial analysis, and Dan Coatsworth, investment analyst, said: “After the spin-offs of London-headquartered fund manager M&G in 2019, a major fundraising in Hong Kong in 2021 and the demerger of America’s Jackson Life in 2022, Prudential is now a play on demand for financial services in Asia and Africa. The firm is a leader in savings and health and protection products and has a strong distribution network for bancassurance too (where banks sell insurance products).

“Prudential’s long-term strategy is to position itself for both population growth and also increased prosperity and the rise of the middle class, as this is potentially the sweet spot for increased demand for financial products and services.”

Prudential has a goal of 15-20% new business profit compound growth from 2022 to 2027. For yearly results, analysts will look to annual premium equivalent, which grew 5% last year; new business profit, which fell 14% in 2022 but recovered in the first half of 2023; and operating profit, which has an adjusted benchmark of $3.38bn from last year.

“The final key yardstick is the dividend, where Prudential has declared its distributions in dollars since its full-year results for 2019, after the M&G spin-off, which reduced the stand-alone pay-out from the parent,” The AJ Bell team said.

“In 2022, Prudential paid out 18.78 US cents (or 15.1p) a share. In the first half of 2023, the board sanctioned a 9% increase in the interim distribution to 6.26 US cents a share. For the final payment, analysts are expecting just under 14 US cents a share to take the full-year total to the equivalent of 15.9p a share, enough for a dividend yield of around 2% (which is around half the average from the FTSE 100 overall).”

Thursday 21 March

Full-year results from M&G, Direct Line Insurance, Dowlais, Judges Scientific, Energean and i3 Energy
Trading statement from C&C Group
Bank of England monetary policy decision
Swiss National Bank monetary policy decision
Flash purchasing managers indices (PMIs) for manufacturing and services industries from Japan, Asia, Europe, the UK and USA
US weekly unemployment claims
In Asia, quarterly results from China Mobile, CNOOC, Ping An Insurance and Wynn Macau
In Europe, quarterly results from BMW, Swatch and United Internet
In the US, quarterly results from Accenture, Nike, FedEx, Lululemon Athletica, Darden Restaurants and Winnebago
Centamin full-year results

FTSE 250 member Centamin is set to release its full-year results on Thursday with gold reaching above $2,150 per ounce.

Mould, Hewson, and Coatsworth noted that while gold is weighed down by its mining costs, lack of yields, and lack of industrial use, proponents highlight its long-time use as a currency and slow supply growth. Gold miners are also valued affordably in comparison to gold, and do have the opportunity to pay dividends create yields.

“The battle lines are drawn, but it is interesting to see gold, purportedly a haven asset and one that tends to shine when there is trouble elsewhere, doing well when markets seem in risk-on mode, judging by how tech and biotech stocks are thriving and the US, Japanese, French and German stock markets are setting all-time highs,” the team said.

The AJ Bell analysts marked geopolitical tensions, interest rate cuts, and increasing government debt for the leap in gold price.

“In terms of Centamin specifically, its shares stand at barely half the peaks reached in 2010 and 2020 despite gold’s recent gains,” Mould, Hewson, and Coatsworth said.

“It produces gold at its Sukari Mine in Egypt, has an exploration site in Côte d’Ivoire and two early-stage projects, one each in Egypt and Côte d’Ivoire. Watch out therefore for any commentary on Egypt’s economic woes, the end of capital control and any implications of its $8bn debt restructuring with the International Monetary Fund.”

Analysts will look for Centamin’s operating profit to hit $228m, a 26% increase, and its operating margins to rise to $316m, a 33% increase.