SHARE INDEX: Three cheers for beer

Dynamic category growth leads market fluctuations. This month’s db index reflects a number of financial announcements made in the beer sector in the past three months.

The price of Heineken’s stock rose by 8.58% despite the departure of its chief operating officer at the beginning of last month.

This is largely due to the Dutch company’s decision to raise its forecast for organic net profit growth for the full calendar year ending 31 December 2006. Heineken now expects that organic net profit growth will be slightly above 10% after making a gloomy pronouncement in February that it would not exceed mid-single digits.

This turnaround in the firm’s fortunes can be attributed to strong volume growth in Central and Eastern Europe, the Americas, Africa and Southeast Asia as well as the successful launch of Heineken Premium Light in the US.

Anheuser-Busch also saw its share price rise by 7.67% after it reported improved sales and earnings for the first quarter of 2006. The company saw consolidated net sales rise by 5.4% and earnings per share increase by 4.9% and managed to restore domestic beer volume momentum after a difficult 2005. International exports were also up by 9.4%, driven by sales in China.

Kirin Brewery also saw its share price rise by 2.73% after it stole rival Asahi Breweries’ market-leading position. Kirin now has a 37.6% share of the Japanese beer market, putting it just ahead of Asahi, which has 37.3%.

This month’s graph tracks the MSCI ACWI Beverages, MSCI ACWI Food Products and MSCI ACWI Hotels, Restaurants and Leisure Indices. While the beverages and food industries continued to grow, the hotels, restaurants and leisure industries were hit by falling consumer confidence and concerns about the global economy.

© db August 2006