Business Outlook

The first full week of trading in the post-holiday period is likely to be quiet on the corporate front with many companies still gearing up for the results season.

Getting results in early is the medical technology group, Synthestretic, which is scheduled to produce its figures on Thursday.

The company has regularly recorded sales growth of around 15 to 20 per cent in recent years, with net profit figures normally around 20 to 30 per cent. Analysts expect similar results to be announced this week.

The stock has performed well recently in line with other medical technology companies but traders think it will consolidate at current levels.

The markets are still coming to terms with the United States Federal Reserve’s decision to cut interest rates last week.

The half per cent cut is unlikely to stop the volatility on the markets and companies sensitive to interest rates, such insurance firms, are likely to be hardest hit. There could be sharp movements on stocks such as Swiss Re and Zurich Insurance.

More defensive stocks such as Nestlé, Novartis and Roche have had strong runs recently and could be hit by profit-taking this week.

On the economic front, the government will release the latest jobless figures on Tuesday.

Last month, the unemployment rate stood at 1.7 per cent – the second lowest among countries belonging to the Organisation for Economic Cooperation and Development. Economists don’t expect the rate to change.

by Michael Hollingdale