News Column

New Pfizer bid hopes push up AstraZeneca

May 22, 2014

BRITAIN'S top share index edged up on Wednesday as shares in drugmaker AstraZeneca rebounded on the view that what appeared to have been an unsuccessful bid for the company may still go through.

AstraZeneca rose 2.6 per cent, adding the most points to the blue- chip FTSE 100 index, which closed up 19.04 points or 0.3 per cent at 6,821.04 points.

Shares in the UK company had tumbled 11 per cent on May 19 after it rejected a bid offer from US rival Pfizer. But several of AstraZeneca's top institutional investors such as AXA Investment Managers have urged it to let Pfizer put its offer to its shareholders.

Beaufort Securities sales trader Basil Petrides said such calls from shareholders to consider Pfizer's bid were helping AstraZeneca's shares recover ground. "There's a small bounce on hopes that Pfizer might go hostile, but I wouldn't want to trade Astra right now. It's too risky to bet on Pfizer going hostile," he said.

Jitters in the supermarket sector returned today after brokers at Deutsche Bank placed a sell recommendation on Morrisons, adding to concerns over the industry's slowest growth in a decade.

Morrisons saw a decline of 4.5p to 205p, while Sainsbury's fell 1.8p to 337.7p and Tesco slipped 2.3p to 303.8p.

Other fallers in London included HSBC, with the banking giant down 8.6p to 618.5p. Mobile phone company Vodafone was off 0.7p to 204.6p as the poor reception to annual results yesterday continued to depress shares.

In corporate updates, shares in luxury goods group Burberry edged up 3p to 1518p after it reported an 8 per cent rise in annual profits to pound(s)461 million.

The figures met forecasts but Burberry's warning that sterling's strength may dent profits this year had an impact on its share price performance.

Shares in FirstGroup recovered from a weak start seen after it announced it would not pay a dividend for the second year in a row as it focuses on the recovery of its UK bus and North American school bus divisions.

Profits still rose 23 per cent to pound(s)111.9 million, helping shares lift 2p to 134.2p.

Traders said the fact that the FTSE had failed to break above 6,900 points had induced some investors to go "short" and sell out to book profits on last week's run-up.

"We're in a bit of a no-man's land at the moment. We've lost a little bit of froth but we're not getting a lot of momentum either way," said MB Capital trading director Marcus Bullus.

The biggest risers on the FTSE 100 Index were Sports Direct International up 27p at 751p, AstraZeneca up 111.5p at 4420p, William Hill ahead 8.4p to 334.4p and Ashtead up 20p at 850p.

The biggest fallers on the FTSE 100 Index were Morrisons down 4.5p at 205p, Pearson off 24p at 1132p, easyJet down 30p at 1550p and Antofagastal off 12.5p at 771p.

U.S. stocks rose, rebounding from the previous day's broad sell- off, after minutes of the Federal Reserve's last meeting showed central bankers have discussed the eventual tightening of monetary policy but made no decisions on which tools to use.

The Dow Jones industrial average rose 1 per cent, its biggest daily percentage jump since mid-April. Goldman Sachs was the top gainer on the blue chip index, up 1.9 per cent at $159.35.

Minutes of the Fed meeting showed the Fed staff presented several approaches to raising short-term interest rates, but said the discussion was simply "prudent planning" and not a sign rate hikes would come any time soon.

The Dow Jones industrial average rose 158.75 points or 0.97 per cent, to 16,533.06, the S&P 500 gained 15.2 points or 0.81 per cent, to 1888.03 and the Nasdaq Composite added 34.65 points or 0.85 per cent, to 4131.54.

Retail stocks were again in the spotlight. Tiffany & Co jumped 9.1 per cent to $96.30 as one of the best performers on the S&P 500 after the jewellery retailer raised its full-year profit forecast. The S&P retail sector index was up 1.2 per cent.

Target Corp reported lower quarterly profit but showed signs of progress in efforts to rebuild customer confidence. The stock ended 1 per cent higher at $57.20.

Despite a better-than-expected first-quarter earnings season, Bank of America-Merrill Lynch gave a cautious outlook on prospects for the rest of the year and 2015.

It forecast S&P 500 profit growth of 8 per cent for 2014 and 2015, below analyst consensus for both years.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Herald, The (Scotland)

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