Business News: Share Index – Hop and down

Two-faced market smiles on S&N and frowns on SABMiller

Beer is in the news again this month with db index share prices reflecting dynamic changes in the sector. In the past three months, British pub group Scottish & Newcastle saw its share price go up nearly 7% on the back of positive financial results announced in August.

At the other end of the spectrum, beleaguered brewer SABMiller is still struggling to maintain market confidence following threats of strike action and management changes in the US. The group saw its share price go down by nearly 6% despite reporting good growth in the year to 31 March. Hopefully, SABMiller’s fortunes will improve following group chairman Meyer Khan’s announcement that the group has completed the initial turnaround programme for Miller in the US, in a bid to make it more competitive. Khan said that, despite challenging market conditions, Miller Lite continued to grow in the US, while lager volume sales grew in Europe and China in the past year. Foster’s Group also saw its share price decline by over 8%, coinciding with S&N’s decision to acquire the trademark beer.

Meanwhile, in the Philippines, San Miguel Corporation has announced that volumes outside the country were up by 9% year-on-year to 26.1m cases, with revenues rising 5% to $138.5m thanks to booming sales in northern China. However, this positive news has still not filtered through to the market, where the group failed to convince investors and lost nearly 10% of its share price.

Outside the beer category, C&C group continues its growth trend with a 28% increase in share price, demonstrating that cider is more than just a passing fad.

This month’s graph tracks the progress of the MSCI ACWI Beverages, MSCI World Beverages and the MSCI Emerging Markets Beverages indices. Following a crisis of confidence in the emerging markets in June, investors appear to have regained their faith in this part of the market.

© db September 2006