London pre-open: Ukraine elections and BoE remarks in focus

19th May 2014 07:40

Stocks are set to begin this week little changed from the end of last, with just a modest decline of around seven points below Friday's close of 6,855.81.Investors will kick off today's session with AstraZeneca firmly in focus after its board rejected a final offer from US pharmaceutical rival Pfizer, saying the new proposal still undervalues the company and would present "significant risks for shareholders".Pfizer lifted its cash-and-shares bid to £55 a share, up from the previous £50-a-share offer made on May 2nd and a lower initial proposal of £46.61 a share in January.The new offer, which raised the cash element, is thought to value AstraZeneca at around £69bn. This is a 24% higher price than the initial January proposal and a 34% premium to AstraZeneca's all-time closing high reached in April.Acting as a backdrop, investors are looking out to next Sunday's Presidential elections in Ukraine. Any delay or failure of the above could trigger so-called "Stage 3" sanctions, co-ordinated with the US, Barclays Research explained to clients on Friday. That could push Russia into a severe recession and lead to retaliatory moves. To take note of as well, on Sunday Governor Mark Carney said that the government's Help-to-Buy scheme might distort the entire mortgage market and need to be curbed. Meanwhile, over in China a report from the real estate sector revealed property prices dropped last month. According to the National Bureau of Statistics, eight of the country's cities saw a monthly decline in the average commercial house price, compared to the four which saw a fall in March. Back in the UK, it has been revealed that new standards body for banks will be launched later this year. Richard Lambert, a former director general of the Confederation of British Industry, said: "Rebuilding confidence and trust in the banks is especially vital in the UK, because of the size of the banking system and the importance to the economy of London's role as an international capital market." Strong showing from Babcock and RyanAirIn other company news out this morning, Babcock International Group reported a 15% rise in annual pre-tax profit as the engineering support services company achieved growth across all divisions. Revenue climbed 9% to £3.5bn in the year to end of March 2014, driven by the strong performance of the Marine and Technology division, which saw revenue rise by 15%.Dixons Retail has signed a deal to sell its ElectroWorld operating in Central Europe to NAY, a regional electrical specialist. The FTSE 250-listed group expects to receive a small deferred cash consideration spread over three years. Completion is set for this summer. Britain's largest pork processor Cranswick shrugged off record input prices to report annual growth in most of its product categories and underlined its confidence in future trading with an increased dividend payment. The FTSE-250 firm, which processes and supplies fresh pork, sausage, sandwiches, bacon, charcuterie and pastry products, said revenue grew 12% for the year ended March 31st to £980.6m, while adjusted pre-tax profit rose 6% to £52.2m.Budget airline Ryanair reported annual profits higher than its expectations and forecast a strong first half of the new financial year, although it remained cautious about the second half.NR