The Hindu Business Line : Cigarette stocks up on FDI buzz

Home Page - Cigarettes
Markets - Stocks
Industry & Economy - Foreign Direct Investment
Columns - Ear to the ground
Cigarette stocks up on FDI buzz

Cigarette stocks were up Monday on market expectations that the Government may soon review policy on FDI in cigarettes.

The Sensex component ITC, which even after diversification continues to be predominantly a tobacco play, moved up 5.5 per cent to Rs 231. Godfrey Philips shot up over 19 per cent and GTC finished with a gain of 9.64 per cent. Two smaller players, VST Industries and RDB Industries, however, closed lower 4.5 per cent and 5 per cent respectively. Godfrey Philips, jointly promoted by Phillip Morris and family of Mr KK Modi, has moved up most (32 per cent)in the past one week, while ITC, the biggest of the pack, recorded a weekly gain of around 10 per cent. In anticipation of a strong Q 3 results, Credit Suisse has revised ITC price target upwards to Rs 242. Market talk was that Philip Morris, which is currently restructuring its international business into two broad geographical entities – one located in the US and the other in Switzerland, and RJ Reynolds (known as Japan Tobacco Company outside the US), are eager to increase their presence in India. Philips Morris holds 35.89 per cent in Godfrey Philips. RJR has a miniscule presence in India through JT International and has a 50:50 joint venture — Modi RJR. Industry sources, however, presented conflicting views regarding the possibility of a deregulation of the tobacco sector.

Jayanta Mallick

More Stories on : Cigarettes | Stocks | Foreign Direct Investment | Ear to the ground

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page