Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

AstraZeneca shares slide while Gilead Sciences soar amid merger rumours

Shares in Gilead Sciences climbed higher on Monday, while UK-based AstraZeneca saw its stock take a tumble after reports of a possible merger between the two companies emerged.

Shares in Gilead Sciences climbed 3% higher in early morning trading on Monday, while AstraZeneca stock closed 2% lower after reports of a possible merger between the two companies surfaced.

Gilead Services share price rally was short-lived, however, with the stock trading flat at $77 at the time of publication, while AstraZeneca closed at £82 per share on Monday.

AstraZeneca-Gilead Sciences negotiations fall flat

Last month, the British drug maker AstraZeneca approached the biotechnology company, which is trailing its drug remdesivir as a potential treatment for the Covid-19 virus, only to have its merger proposal shot down.

AstraZeneca’s shares took a tumble in the wake of the deal rumours, with investors left scratching their heads as to why the British drug maker would entertain a deal with such a poor rationale and require a significant amount of capital to complete.

If the merger did go ahead it would combine the two companies efforts in finding a cure for the coronavirus. However, it would likely create a politically sensitive situation whereby each company’s government’s would seek control over any potential vaccine or treatment created by the pair.

‘[Gilead] may be on the verge of having one of the fastest growing products in the industry, if they can successfully establish profitable commercial pricing for remdesivir,’ SVB Leerink analyst Geoffrey Porges told Reuters.

AstraZeneca: JP Morgan reiterates ‘overweight’ rating

Analysts at JP Morgan remain optimistic about AstraZeneca, with the US-based investment bank reiterating its ‘overweight’ rating for the stock and issuing a target price of £84.27 per share, implying a potential upside of 2.7%.

JP Morgan said that there was a ‘low probability’ of a merger between AstraZeneca and Gilead Sciences, with the US government likely resistant to the company being acquired by a foreign drug maker.

However, the investment bank did concede that if the deal were to go ahead it would support AstraZeneca’s earnings.

‘We calculate this would be highly accretive to Astra earnings in the medium-term, with around 50% core EPS accretion in 2021, 40% accretion in 2022, accretion in the 20s in 2023-25,’ JP Morgan said.

‘In addition, to the EPS accretion, depending on the offer structure, the deal could also allow Astra to de-lever, which in turn could provide more room for pipeline in-licensing.’

How much does it cost to buy UK shares with IG?

There are three ways to ‘buy’ UK shares with IG: spread betting, trading CFDs or buying physical shares. The cost will depend on which method you choose. The table below illustrates how the costs to get exposure to £10,000 of Lloyds stock, which is equivalent to 16,000 shares (quoted at 62.5p a share).

Remember, spread bets and CFDs are derivatives, which come with higher risk and reward than investing.

Cost to get exposure to Lloyds stock

Spread betting CFD trading Share dealing
Action Buy £160 per point Buy 16,000 share CFDs Buy 16,000 shares
Capital required to open £2000 £2000 £10,000
Total fees £20.88 £20.88 £16

Ready to start trading shares? Open a live account or practise on a demo.

Note: Amounts do not include overnight funding charges and taxes. Spread bets are not subject to tax. CFDs are free from stamp duty, but subject to capital gains tax. Share dealing is subject to both stamp duty and capital gains tax.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.