BAT slumps after share spin-off

British American Tobacco ended as the day's [22 October 20089] biggest FTSE 100 faller, following the spin off of a 30% stake in the company previously held by Swiss luxury group Richemont and South Africa's Remgro.

The bulk of the shares - around 90% - will be distributed to Richemont and Remgro shareholders at the beginning of November, and the rest will be held in a new investment vehicle called Reinet, which began trading for the first time today.

There have been concerns about the effect on BAT if the new holders of the shares decide to sell them in the market, while Reinet could well want to diversify its assets at some future point.

But Tina Cook at Charles Stanley said:

"While there is a risk that this [share overhang] might temporarily depress BAT's share price, several options are being put in place to limit the number of forced sellers (including a secondary listing on Johannesburg Stock Exchange at the end of October). Index funds are also likely to emerge as buyers of BAT shares due to the increased free float (with the FTSE weighting increasing from 75% to 100%). We view any technical weakness as a buying opportunity."

BAT - which reports third quarter figures next week - closed down 146p at £15.68.

Source: The Guardian, 21 October 2008
Link: http://tinyurl.com/6gklc2

WHO keeps tabs on smokers with 'death clock'

The World Health Organisation and anti-smoking activists unveiled a death clock tracking how many people will die from tobacco use to mark a new campaign against the illicit tobacco trade.

The "death clock," which shows the number of tobacco-related deaths since the WHO Framework Convention on Tobacco Control (FCTC) negotiations began in October 1999, stood at just under the 40 million mark at the unveiling.

The WHO said it expects tobacco to kill more than 5 million people this year -- greater than the combined death toll from Tuberculosis, AIDS and Malaria.

"This epidemic is hitting the poorest of the poor," said Douglas Bettcher, director of the WHO's Tobacco-Free Initiative.

He added that "we do see some green shoots in some countries" taking action to curb tobacco use, such as the use of graphic pictures showing damaged lungs and other health consequences on cigarette packets.

Six hundred delegates from over 150 countries are meeting in Geneva this week to negotiate an FCTC protocol against the illegal trade in tobacco products.

The WHO said this trade is linked to organised crime and even terrorism, and it estimates that 50 billion dollars is lost in tax revenues to governments every year.

Source: AFP, 21 October 2008
Link: http://tinyurl.com/5vkc72

Children may be more affected by secondhand smoke than adults

A study presented at this year's Annual Meeting of the American Society of Anesthesiologists provides evidence that the carbon monoxide levels of children exposed to secondhand smoke are often similar to that of active adult smokers and frequently higher than levels in adults exposed to secondhand smoke. 

Branden E. Yee, M.D., and his research group from the anesthesiology department at Tufts Medical Center studied 200 children between the ages of 1 and 12 to assess their levels of carboxyhemoglobin, which is formed when carbon monoxide binds to the blood.

Carbon monoxide binds to blood 200 times more easily than oxygen, but the resultant carboxyhemoglobin is unable to deliver oxygen to body tissue, including that of the brain, heart and muscle.

The exact ramifications of high levels of carboxyhemoglobin are not entirely known, but potential consequences of long term, low level exposure include changes in heart and lung tissue.

Although household and environmental factors such as stoves, heaters and automobiles are potential sources of carbon monoxide exposure, the most likely source of elevated carboxyhemoglobin overall is secondhand cigarette smoke.

According to Dr. Yee's study, the younger the child, the greater the potential level of exposure. "The physiology of children - especially the youngest - is different from that of adults," said Dr. Yee. "Children breathe in a greater amount of air per body weight compared to adults."

Another possible explanation for the youngest children having the highest levels of carboxyhemoglobin is that they are completely reliant on their parents and are thus exposed to everything their parents are, including air pollution, cooking exhaust and, of course, secondhand smoke, Dr. Yee said.

Dr. Yee stressed the importance of education in helping to change parents' smoking habits, especially around children. He thinks that the right blend of physician intervention and technology could have positive benefits.

"The simple, non-invasive device we used to test exposure may encourage health care providers to ask further questions of children and their parents regarding smoking habits," said Dr. Yee. "Personalized education coupled with the act of physically showing a parent the carboxyhemoglobin measurement in his or her child's blood may provide a graphic and concrete message to that parent."

Source: Medical News Today, 20 October 2008
Link: http://tinyurl.com/5zdrxe

USA: Reynolds, Philip Morris profits exceed estimates

Reynolds American Inc. and Philip Morris International Inc. reported third-quarter profit that exceeded analysts' estimates, helped partly by price increases.

Reynolds said, Camel and Pall Mall gained market share, and volume in the Conwood smokeless tobacco unit was strong even after price increases. The company posted profit excluding restructuring costs that topped analysts' estimates. Philip Morris said it benefited from higher prices and sales of its cigarettes in Russia and Indonesia.

Reynolds, the second biggest U.S. tobacco company, lowered administrative expenses and raised prices on its Grizzly snuff. Sales volume of the brand climbed 14 percent in the quarter. Philip Morris widened distribution of Marlboro cigarettes in Mexico and other emerging markets and said demand for more- expensive brands climbed in Eastern Europe and Asia.

Revenue declined 1.1 percent to $2.27 billion at Reynolds. Volume of its least-expensive cigarette, Pall Mall, climbed 34 percent as cash strapped consumers traded down to cheaper tobacco products.

Profit at Philip Morris rose 21 percent to $2.08 billion, or $1.01 a share, from $1.73 billion, or 82 cents, a year earlier.

Earlier this month, Philip Morris acquired Canada's Rothmans Inc. after buying some of Imperial Tobacco Group Plc's fine-cut tobacco trademarks in June.

The takeovers underscore Camilleri's strategy to bolster growth with acquisitions as smoking restrictions and higher taxes weigh on European sales.

Philip Morris is the world's second largest tobacco company after state-owned China National Tobacco Corp.

Source: Bloomberg, 22 October 2008
Link: http://tinyurl.com/6glzfy

Australia: Smoking kills 3000 Victorians aged under 50 a year

Smoking related illnesses are killing more than 3,000 Victorians a year under the age of 50 - leaving behind nearly 10,500 sons and daughters.

The statistic was released by the Cancer Council Victoria today as it launched a powerful new television campaign aimed at encouraging parents to quit smoking.

Five per cent of Victorian adults with children aged 12 or younger are smokers.

Quit Victoria executive director Fiona Sharkie said a key message for smokers was that not everyone who died from a smoking related illness was elderly.

"The fact is that every week four Victorians lose a parent under the age of 50 to a smoking related illness,'' she said.

"Sadly, when it comes to smoking caused death, people from all age groups are affected, not just the elderly as is often thought.''

Former smoker and parent of two young boys, Christin McCormick, said quitting smoking was one of the most important gifts a parent could give their children.

"Whilst quitting smoking may be tough, it is much tougher to imagine your children growing up without you as a result of it,'' she said.

Ms McCormick said that after she quit smoking she was diagnosed with a rare heart condition, which would have been more difficult to treat if she was still smoking.

Ms Sharkie said the new campaign, powerfully depicts the personal and emotional impact that smoking-caused illnesses had on the lives of smokers' families.

She said smokers who had already viewed the campaign had almost unanimously said it made them feel like quitting for their children.

Source: Herald Sun, 23 October 2008  
Link: http://tinyurl.com/5z38ml