Betting on BAT

Riding High

Rolling in the Profits

Despite so many anti-smoking campaigns world-wide and exorbitant tax levy, most tobacco company counters continue to go up. Individuals actually find it very hard to own tobacco shares anywhere in the development world. The same is going to happen to Malaysia.

Look at the way British American Tobacco shares are going upwards,it is now very difficult for a retail player to purchase a 1000 shares at today's going price of RM51.50 per share. At best, you would have to cough out RM5,150 for a token 100 units of it.

BAT is certainly a good counter and pays absolutely beautiful dividends. Ask any minority shareholder and he will tell you that the share has been good to him with its bumper dividend pay-out every now and then. I will delve a little bit on BAT's dividend in another posting.

After a lull from the beginning of the year where its shares ranged from just below RM50.00, today is one break-out day. From RM50.30 , it shot passed up to almost touch RM52.00. One lot was done at RM51.98 and another at RM51.90. A dozen lots were contracted at RM51.88 before weak sellers came out from the woodwork to sell the counter down. Before the market ended, massive buying appeared out of nowhere. Some 69,500 shares changed hands during the last hour or so. This is equivalent to 51% of all volume traded.

Price-wise BAT shares have soared today by 2.4%.

Why is BAT flying like crazy?

Is it being bought by institutional buyers from overseas as a proxy to a strengthening ringgit? Or are they bought by local funds, a delayed January effect response?

Maybe another super dividend is in store as BAT has time and again been giving shareholders sweet surprises.

There is also that possibility that a bonus may be given or a share split might be in the offing.

Finishing Strong! at RM51.50

Whatever the reason, BAT is one might good counter to watch and to invest.