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Three things to look for in Sainsbury’s results: Investors get to see the results of new Chief Executive Mike Coupe’s strategic review and here are the three things Questor will be looking for. Dividend chop - Sainsbury’s investors should be prepared for a cut in the dividend, the question is how low will it go? Last year’s interim dividend was 5p, and a 30% cut on that would be in the 3.5p region. However, with profits also set to fall it would make more sense to cut the dividend lower to give it room to rise, so a 50% cut to 2.5p wouldn’t be a surprise. Profit margin outlook - The City expects Sainsbury’s to post a 12.5% fall in underlying pretax profits to £350 million. That would push full year pretax profits down 25% to £670 million, on revenue largely flat at £24 billion, or a profit margin of 2.8%. All eyes are now on profit margin guidance for the future. End of the space race - John Kershaw, analyst at Exane BNP Paribas, said that Sainsbury’s might cut the amount of space it opens by a third. He expected Sainsbury’s to open less than 500,000 sq ft of new selling space in the next financial year, down from 750,000 sq ft this year. If the company mothballs sites earmarked for new supermarkets then it might be forced to write-down the value of land on its balance sheet. Clive Black, an analyst at Shore Capital, said Sainsbury’s might cut capital expenditure from just below £900 million this year to between £550 million and £600 million in future. J Sainsbury at 261.2p +6.5p. Questor Says “Sell”.

London offices: selling into strength: The London office market is attracting international capital. A Taiwanese insurance company has bought a block near the Bank of England for £320 million, Brazil’s Safra group this week paid £700 million for a nearby tower known as the Gherkin, and the Qatar Investment Authority made a (rejected) £2.2 billion bid approach for the company that owns Canary Wharf. In the year to date, £9.9 billion has been invested in central London offices according to property agents JLL. The Gherkin deal is eye-catching, coming at an investment yield of 3.8%. City yields over the past seven years have averaged over 5%. But office Owners, such as the listed property companies, have a dilemma. London offices are good to own. Land Securities, which has more than half of its portfolio in London (mostly offices), on Tuesday reported an 11% jump in net asset value over six months. Together with rival British Land it is enjoying the benefits of brave decisions taken in 2010 to launch speculative developments (including big towers known as the Walkie Talkie and the Cheesegrater). With such a healthy rental market, now may not look the best moment to cut exposure. There is an election next year; interest rates will rise at some point; and lots of new supply is on the way – according to Deloitte, the amount of office space being built in London is at a 10-year high. All that space will eventually put a lid on rent rises. This week, Great Portland Estates, a central London specialist, sold an office development near Fleet Street for £166 million, at a yield of 4.5%. Others should follow its example, and take advantage of the strong market to prune their portfolios.

Bank set to shut Asian branches: Up to 100 branches are to be shut by Standard Chartered next year as part of an attempt to cut $400 million of costs as the bank faces pressure from investors to improve its performance.

Oil price is skidding towards $80 a barrel: Brent crude fell to a four-year low in London, testing the $80-a- barrel mark.

We expect to hear about re-engineering, cost cutting and productivity opportunities but, with sales densities falling, cost ratios rising and gross margins restricted due to competitive pressures, we see little prospect for growth HSBC was downbeat ahead of the results of J Sainsbury's strategic review, due tomorrow

Housebuilding and construction group Galliford Try has announced that its infrastructure business has been appointed by the Highways Agency to its collaborative delivery framework. The group is one of six contractors due to deliver works worth a total of up to £1.15bn over the five-year duration of the framework.

Government's plans to levy fines of up to £300 on savers choosing to access their pensions like a bank account are a "unfair", the Financial Times reported. Savers will have the opportunity to cash in their pension from next year, but those who access their funds "flexibly" from April could be fined up to £300 if they fail to notify all their other pension providers within a month. Dr Ros Altmann, an independent pensions expert and adviser to the government, said that fining savers was "unworkable" and "draconian" and would "disproportionately disadvantage" the less wealthy.

Building materials group CRH saw a severe slowdown in growth in the third quarter as like-for-like (LFL) sales in Europe slipped, but said it still expects profits to grow around 10% this year. LFL sales across the group increased by 3% in the three months to September, down from 5% in the first half, as 6% LFL growth in the Americas regions was partly offset by a 2% LFL fall in Europe.

Aviva closes IPO of Turkish arm: Insurance company Aviva confirmed the closing of its Turkish arm’s IPO, following its announcement in September that it was offering to the public market a minority stake in the shares of its joint venture with Sabanci Group, AvivaSA.

Prudential to sell off health insurance venture in a deal worth around £620 million: Prudential will sell off its British health insurance arm in a deal that values the business at £620 million.

Three reasons to avoid Serco shares: Serco shares have now fallen to the lowest level in a decade but this is not a buying opportunity. There are important reasons why investors should steer well clear of the shares. The only thing that was missing was the resignation of the Chief Executive but that was because he’d already gone, with former Aggreko Boss Rupert Soames taking over in May. 1 - Election, election, election - Outsourcing companies thrive on a steady pipeline of new contracts to increase revenue and profits. These deals tend to be moving public sector work into the private sector but the upcoming election is causing a hiatus in new contracts. As a result, a healthy order book of £17.1 billion at the end of June could be slow to replenish. 2 - Goodwill and debts - While revenues and profits are more uncertain, the other issue for investors is the debt pile. Debt has first claim on profits, cash and assets when things start going wrong. Net debt levels – total debt less cash – are now rising and are expected to hit £675 million by the end of December. Putting that in perspective, the balance sheet boasted shareholders’ funds of £1.23 billion at the end of June, the largest constituent of which was goodwill. When you buy a company, goodwill is the difference between the cash you pay and the assets you get. Serco has said it is now taking a different view of the value of that goodwill, particularly in relation to its Global Services BPO business. 3 - Contractual problems - The other major part of the write downs or some £450 million is in loss making contracts. The tricky part for Mr Soames is that often outsourcers agree to deliver a level of service at a price for a number of years. The closer management looks, the more problems it seems to find. There is still too much doubt on the final amounts of the write downs on the goodwill and shareholders are looking incredibly exposed to further losses as the banks and bondholders gain the upper hand. The shares trading on 15 times forecast 2014 earnings per share of 15.6p, are still not looking cheap, especially given the challenges ahead. This is one to steer well clear of. Serco at 220.2p -96.9p Questor Says “Avoid”.

Housebuilder Redrow calls the end of Britain’s mini-housing boom: U.K. housebuilder Redrow has warned that it is selling fewer homes a week than it was in the summer of 2013 - just after the Government launched phase one of its Help to Buy stimulus package.

Serco: getting out the hose: Serco Chief Executive Rupert Soames is a fan of linguistic colour. On Monday the outsourcing company described the latest upheaval as a case of reculer pour mieux sauter – going backwards to make a better leap forwards. The going backwards part is everywhere: the £1.5 billion write off following a review of goodwill and mispriced contracts; the accompanying profit warning that, according to Citi, wipes about 40% off consensus forecast earnings for next year; the £550 million rights issue that may be required next year to shore up the balance sheet; and the share price drop of almost a third on Monday (taking the fall to 57% in a year). But if this is the prelude to a jump, then it is worth considering where it might jump to. In future the company will focus entirely on public sector clients (the “B2G business”) in a market which, it estimates, will grow 5-7% a year. It also thinks that operating margins might be 5-6%. So assume a recovery from a 2016 nadir and by 2018 Serco might be making £160 million of operating profit. Depending on the interest rate and tax charge, that might leave net profits of perhaps £100 million to £110 million. Monday’s share price fall put the market capitalisation at £1.2 billion, or 11 times that potential 2018 profit. Not cheap for profits that are so uncertain and so far off. Do not underestimate Mr Soames’ ability to turn Serco around. But in another turn of phrase, he likens Serco to a horse covered in manure, which he is planning to wash off. It is not yet clear whether the animal below is a thoroughbred or a donkey.

LONDON, Nov 10 (Reuters) - Britain's upper house of parliament will on Monday consider plans for a sovereign wealth fund to be set up with revenues raised from shale gas, a source of energy which the government hopes will offset the decline of output from the North Sea. As part of discussions about legislation on infrastructure, the House of Lords will debate a government plan announced over the weekend to create a fund with money raised from shale gas -- once production of this gas trapped in rocks beneath the ground starts towards the end of the decade. Britain is betting on shale gas to help boost energy production even as operations in the North Sea age. But it has met some local opposition based on concerns over the extraction method's environmental impact. Britain's energy ministry said on Saturday that a shale gas fund would ensure other generations would benefit from the commercial production of shale gas. "With the sovereign wealth fund everyone in the community will benefit, adding to known wider benefits of shale, such as increased tax revenues, growth and jobs," said Energy and Business Minister Matthew Hancock in a statement. Britain's finance minister George Osborne said in a separate statement the fund would focus on the north of England -- an area where most of Britain's shale gas plans are taking place -- and whose economic performance lags behind the south. Osborne is expected to elaborate on the plans in his budget update next month. The government has already promised 100,000 pounds ($159,000) in compensation to communities living near shale gas sites, as well as a community fund made up of a percentage of a developer's revenue from a drilled well.

Shopping centre owner Hammerson said that conditions in the UK retail market have improved since the half-year stage, but are still subdued in France. The company, which owns the Bullring shopping centre in Birmingham and Brent Cross in London, said long-term leases were achieved 9% above estimated rental value (ERV) across the group and 8.5% ahead of previous passing rents. Retail leases were struck 15% above ERV in the UK, but just 1% above ERV in France.

Hold Dairy Crest on milk deal: Dairy Crest shares jumped 14% as investors cheered the potential sale of its milk business that would leave it with a stronger balance sheet, lower debts and higher profit margins. The dairy giant looks set to concentrate on cheese if the deal to sell its dairy business to Müller is completed, which is no bad thing for investors. Whatever happens, the chunky 5.2% prospective dividend yield on the shares looks likely to continue. The more startling figures are in the profits, where the dairies made losses of £4.4 million, while cheese churned out £16.8 million and spreads made £12.7 million of the £25 million total group operating profits. It is well known that the profit margins are wafer thin in the milk market. The only chance of survival in dairy milk production is scale and Dairy Crest has decided that investors’ money is better spent elsewhere, hence the sale. It looks like sound logic. Meanwhile, Dairy Crest is investing heavily in China. The company has agreed to sell powdered whey from its cheese plant in Cornwall to global markets through New Zealand group Fonterra, which will receive a commission. Dairy Crest is in turn spending £45 million on a new facility to remove minerals from the whey, which will be sold to Fonterra to make into baby milk formula. There are, of course, risks of the Müller deal not going through. It still needs to get the green light from the competition commission and this is not a given, as it would result in three milk producers becoming two. There is also a fear that, having handed over milk production to another company, the prices of the raw material could then be steadily increased, eating into Dairy Crest’s cheese margins. Nothing is confirmed yet so we wouldn’t buy here, while long term investors should hold on for that dividend income. Dairy Crest at 490p+63¾p Questor Says “Hold”.

Regus Plc: RBC Capital Markets Retains the stock with “Sector Performer” rating and a target price of 215.00p.

National Grid to build 14,000 homes: Vacant gas storage sites to be turned into housing estates: Old gas storage sites will be turned into new homes to help plug Britain’s housing gap under a radical new scheme.

Buy AstraZeneca on revenue upgrade: Astrazeneca’s [LON:AZN] results are something of a sideshow at the moment to the looming late November deadline when U.S. drugs giant Pfizer can come back with another bid for its British rival. It looks like a pharmaceutical company with the size and reputation of Pfizer will not be deterred that easily and is still willing to pay a premium for shares. The market is telling us this because there is still a big bid premium in the share price. AstraZeneca shares were trading around £37 before the initial Pfizer offer and they closed at £45.91½, so the game is clearly still afoot. It is understood that Pfizer was willing to value Astra at about £70 billion, or about £56 per share last time round a 22% premium closing price. What the bid from Pfizer suggests is that those in the industry are more optimistic about the prospects for Astra’s drugs pipeline than its own investors. Pfizer said the deal was “a highly compelling opportunity” for Astra’s shareholders. AstraZeneca appears to be circling the wagons in preparation for another bid. The pharmaceutical group is scheduling an investor day on 18 November, one week before the expiration of the obligatory six-month cooling-off period. However, a tightening of rules in the U.S. relating to tax inversions is thought to have lowered the probability of a second takeover attempt by Pfizer. Pharmaceutical sector peer Shire saw its shares slump by more than 25% after its U.S. suitor AbbVie walked away after citing a changing approach to tax inversion deals. But Questor thinks that, with or without the bid interest, shares in AstraZeneca are a good long-term investment. The FTSE 100 pharmaceuticals giant said it expected full year revenues to increase in the low single digits. In July it said annual sales would be flat, which itself was an improvement on an earlier prediction that they would fall by low-to-mid single digits. AstraZeneca’s upbeat forecast came as it posted its third straight quarter of revenue growth, with sales up 5% year-on-year to $6.5 billion (£4 billion). We suggested investors buy Astra last year (£34.59, Dec 7) and, with shares 33% higher, we remain positive on this long-term recommendation. AstraZeneca at £45.91½-28½p. Questor Says “Buy”.

OPG signs new power deal: OPG Power Ventures [LON:OPG] a power company based in India and listed in London, offers U.K. investors the opportunity to benefit from power shortages in India. The Aim-listed company secured a deal last month that underpins future revenues and profits. The utility company has agreed to sell its power output in Chennai to the Tamil Nadu Generation and Distribution Corporation at 5.50 rupees per kilowatt hour until 30 September 2015, a similar level to existing profitable deals. The full year results announced in May underlined the investment case. Pretax profits jumped 70% to £17.95 million, on revenues up 78% to £98.8 million during the year ended March. The company is growing quickly through a vast power plant construction project. The main input cost is the price of coal, which is currently falling. The final issue is currency risk around the Indian rupee, which has now stabilised, after sharp falls last year. That said, the company continues to deliver and the shares are up 13% on our initial recommendation (Buy, 94p, 22 May) and we retain that recommendation. OPG Power Ventures at 107p. Questor Says “Buy”.