The bank said the group remained one of its top picks, reiterating its Buy rating.
“We note that BAT has seen positive organic volumes over the last four quarters. The unique characteristics of tobacco - being the only staples sub-sector with real long-term static and dynamic pricing power - means it does not need (and has not needed) organic volume growth.”
“Cold feet or money troubles? “ asks Shore Cap’s Yuen Low, after Yellow Dragon sold its entire 50mln holding of Bushveld Minerals (LON:BMN) shares earlier this month – “we think at a loss,” conjectured the analyst.
“We were surprised to see on Friday afternoon that Yellow Dragon has disposed all 50mln of its shares in Bushveld.”
“We wonder whether the disposal signals cold feet or liquidity issues at Yellow Dragon, as the shares were apparently sold on August 9, 2016, at which time the shares were trading at c.1.45p/share (i.e. Yellow Dragon would likely have made a loss on the transaction).”
The bank said it liked KAZ’s strong growth profile, while the execution risks at Bozshakol and Aktogay has decreased materially.
Macquarie downgraded Glencore PLC (LON:GLEN) to Neutral, with a target price of 200p.
Citigroup meanwhile reiterated its Neutral rating for Glencore.