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Upbeat update expected from HMV

06.05.08

Brokers at HSBC are hoping for a "punchy" presentation from HMV, when it publishes its pre-close trading update on Friday. In a preview note, reported in the Independent, the brokers state: "We expect HMV to announce an upbeat [update] with good growth in games and DVDs, reasonable performance in books and a moderating decline in music.

"The recent disclosure of the terms by which Sir Richard Branson offloaded the Virgin retail chain (now renamed Zavvi) increases our conviction that HMV's major UK competitor is likely to diminish as a threat – possibly to zero – over the next five years." Despite the positive assessment, HSBC was wary of the likely share price reaction, adding: "HMV has long been one of the most shorted stocks in the sector. Currently 37 per cent of the stock is on loan," the broker said, noting that there could be an exaggerated share price response to any positive news flow.

Independent

Retail Financial waterstone's HMV

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