BAT Shares Gain After Tobacco Called `Safest Haven'

Source from:  By Thomas Mulier Nov. 22 (Bloomberg) 11/23/2007

British American Tobacco Plc, the maker of Lucky Strike cigarettes, rose the most in more than two years in London trading after JPMorgan Chase & Co. analysts called tobacco the ``safest haven'' during recessions and bear markets. Tobacco shares outperformed the stock market in every recession from 1973 to 1999 by as much as 19 percent, Erik Bloomquist and Sam Weeman, the analysts, wrote in a report today. JPMorgan has an ``overweight'' recommendation on BAT. ``Relative to other staples sectors, over the period the only other sector as defensive was food,'' the analysts wrote. BAT, Altria Group Inc. and Japan Tobacco Inc. shares are poised to rise by an average 21 percent in the coming year, Bloomquist and Weeman estimate. Tobacco stocks outperformed in most bear markets by 15 percent, they added. BAT shares rose 65 pence, or 3.6 percent, to 1,861 pence in London. The percentage gain was the biggest since July 29, 2005. Imperial Tobacco Group Plc rose 7 pence, or 0.3 percent, to 2,491 pence. Swedish Match AB advanced 3.75 kronor, or 2.6 percent, to 147.25 kronor in Stockholm. Enditem