MARKET REPORT: American vaping retreat lights up tobacco stocks

London’s leading tobacco firms lit up the stock market after US authorities announced a less extreme crackdown on e-cigarettes than they had been expecting.

Footsie stalwarts British American Tobacco and Imperial Brands had been bracing for a blanket ban on e-cigarette flavours.

The US government will eliminate fruit, dessert and mint flavours to curb what it regards as a vaping epidemic among teenagers. But, thankfully for BAT and Imperial, menthol and tobacco flavours have been exempted.

Clampdown: The US government will eliminate fruit, dessert and mint flavours to curb what it regards as a vaping epidemic among teenagers

And the new guidelines from the Food and Drug Administration would also allow companies to bring back some of the outlawed flavours if regulators agree. BAT said: ‘This clarity is a welcome step towards returning the US vapour market to stability’.

Jefferies analyst say it will have a minimal effect in the longer run.

BAT gained 2.7 per cent, or 87p, to close at 3352p, while Imperial closed 2.5 per cent, or 46.2p, to 1922.2p. But fears of a regulatory clampdown hurt gambling groups.

In a report, industry body the British Gambling Commission said it could ban VIP accounts for frequent gamblers amid a wider push to tackle addiction.

Even though VIP customers are a small part of customer numbers, they provide the bulk of gambling deposits. The commission also said it could limit deposits.

Stock Watch – Tri-Star Resources

Finance issues for a mineral processing facility in Oman sent Tri-Star Resources down 58.7 per cent, or 20.25p, to 14.25p.

It owns 40 per cent of Strategic & Precious Metals Processing (SPMP), which is developing a plant to process gold and antimony, used in fireworks.

SPMP needs £122million to get the facility up and running and bring it to full production by the end of 2020.

But its long-term future is ‘uncertain’ because funding offered so far has been ‘unacceptable’, says Tri-Star.  

William Hill tumbled 4.7 per cent, or 9.1p, to 186.25p, 888 Holdings fell 1.6 per cent, or 2.7 per cent, to 162.7p, while Ladbrokes and Coral owner GVC Holdings slipped 1.5 per cent, or 14p, to 905p. 

The FTSE 100 rose 0.2 per cent, or by 18.1 points, to close at 7622.4, while the FTSE 250 ended in the red – down 0.5 per cent, or 120.1 points, at 21,988.19.

Across the pond, major markets the S&P 500, Dow and Nasdaq were in the red as traders fled equities to safe haven assets such as gold after the US assassinated Iranian commander Qassem Soleimani in Iraq.

Shares in electric car maker Tesla, however, climbed 3.5 per cent to $448 after it scored record production and deliveries during the fourth quarter. 

It sent out around 367,500 cars to green drivers in total last year, exceeding Wall Street’s expectations.

Back on this side of the Atlantic, budget airline Ryanair said it flew 9 per cent more passengers – around 11.2m – in December than it did in the same month the year before.

Traffic at Ryanair was up 7 per cent to 10.7m, while Lauda passenger numbers surged 67 per cent to 500,000.

But its shares fell 0.9 per cent, or 0.14 cents, to €14.79, as airline stocks were hit with the fallout from the assassination. 

A jump in the oil price in reaction to the US airstrike made traders nervous that the price of jet fuel, a major cost for airlines, will rise.

Body armour and gas mask maker Avon Rubber was boosted by an upgrade to its target price, from 2,000p to 2,500p, by brokers at Peel Hunt, who kept a ‘buy’ rating on it, saying it is ‘the global market leader for war-fighter protection from the waist up’. It rose 5.8 per cent, or 120p, to 2200p.

But Homeserve investors were little moved by a Peel Hunt upgrade from ‘add’ to ‘buy’. It edged up 0.2 per cent, or 3p, to 1285p, as the brokers raved about the potential for double-digit growth and takeover opportunities.

Finally, Gulf Marine Services’ backers tentatively welcomed news it has won two contracts for an undisclosed sum. The London-listed firm operates support vessels that service deepwater oil and gas rigs and offshore wind farms.

But it was stung by making big investments during turbulent trading and recently suffered a profit warning and investor revolt. It rose 0.7 per cent, or 0.05p, to 7.4p.

 

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Source link