What's in store today...

Corporate news falls thick and fast on Thursday, with updates from BG Group (BG.), Rolls-Royce (RR.), Shire (SHP) and Diageo (DGE).

Charles Stanley estimates that BG Group's net income for the full year could come in at $4.3 billion (£2.7 billion), with net debt rising to $10.5 billion from $6.9 billion in 2010.

However, analyst Tony Shepard believes the debt should not be a problem. "BG Group should be highly cash generative once the Brazilian output builds and Queensland liquefied natural gas (LNG) comes on stream though as a result, portfolio management is to the fore and there has been speculation about the possibility of BG selling down its Brazilian interests," he said.

Additionally, strong underlying growth in LNG profitability accentuated by the impact of Fukushima and improved realisations should see BG Group upgrade its guidance, according to Shepard. At the third-quarter results, BG Group's guidance on LNG profitability was $2.4 billion.

But Shepard believes that the positive outlook is already reflected in the valuation, with shares in the company trading on a 2012 price to earnings ratio of about 16 times with a dividend yield of 1.2%. He had a 'hold' recommendation on the stock.

Rolls-Royce is on track to meet full-year guidance, according to Charles Stanley analyst Tina Cook, who reminded investors that the company expects revenue to double over the next decade through organic growth alone.

Investors will look forward to the company providing more details on the joint acquisition with Daimler of Tognum, as well as an update on the order book, which expanded to a record £61.4 billion in the first half.

In addition, the balance sheet remains robust, despite payments of more than £1.4 billion for acquisitions.

And even though shares in the company have gained more than a quarter of their value over the past year, Cook retained her 'accumulate' recommendation. "Rolls-Royce continues to benefit from a diversified business model, global reach, resilient earnings and commanding share on the next generation of civil aircraft currently entering service," she reasoned.

Specialty pharmaceutical Shire will also report its 2011 results on Thursday. After a cautionary statement from AstraZeneca (AZN) and a mixed set of results from GlaxoSmithKline (GSK), investors will be looking for an update from management on the widely-reported shortage in the US of the active ingredient for Adderall.

"Demand for this product remains strong and the supply constraints remain the primary constriction," noted James Dawson, analyst at Charles Stanley, who reiterated his 'accumulate' recommendation.

Management has yet to provide guidance on expectations for 2012.

Has Jack Daniels kept on walking? Brewer Diageo will answer that, and more, when it publishes its first-half results.

The company had a very strong first quarter, with organic sales growth of 9%. This growth is expected to continue following a robust US holiday period and solid emerging market growth, which should offset weakness in Europe.

Diageo trades on a slight premium to the sector at a 2012 price to earnings ratio of 14.5 times.

In economic news, the Monetary Policy Committee (MPC) meets on Thursday.

The minutes of the MPC's January meeting did not reveal any discussion over the possibility of trimming interest rates from the current record low of 0.5%.

"While interest rates are unlikely to go any lower, it seems highly probable that they will not rise during 2012 and at least the first half of 2013," predicted Howard Archer, chief UK and European economist at IHS Global Insight.

However, he "strongly" suspects that the Bank of England will announce a further £50 billion of quantitative easing.

"Last October's £75 billion of quantitative easing was due to be spent by early February, and with gross domestic product contracting 0.2% in the fourth quarter of 2011 and the economy currently still facing a highly challenging environment despite an apparent pick-up in services and manufacturing in January, there are compelling reasons for the Bank of England to administer further stimulus for the economy," he opined.

Thursday 9 February

Trading update

BG Group, Rolls Royce, Shire, Diageo, Metroelectric, British Land, Catlin Group, Rio Tinto, Enterprise Inns, Rank, Vodafone, Hargreaves Landsdowne

AGM/EGM/Special Meetings

Greencore, Proventec, Enterprise Inns.

You can follow all the day's economic and corporate updates in our market report.