KUALA LUMPUR (April 19): The fall in the share price of British American Tobacco (Malaysia) Bhd (BAT) matches the decline in the size of the legal tobacco market in Malaysia, said group chief financial officer Ricardo Guardo.

"There is a correlation between our share price and the size of the legal market, which fell to 41.7% in 2017," Guardo told reporters after the group's annual general meeting today.

Conversely, the size of the illegal market had grown to 58.3% last year from 52.5% in 2016, added group managing director Erik Stoel.

BAT's price fell to an all-time low of RM22.74 yesterday. The counter recovered slightly today, trading at RM24.38 an hour before the market close.

Stoel said that going forward, any growth in the group's revenue and earnings would largely depend on the measures the government takes to crack down on illegal trade.

"We are confident enough to say we will continue delivering growth in the legal market, but ultimately, it comes down to the measures the government will take on illegal trade," he said.

"Tobacco consumption by Malaysians rising to an all-time high last year had largely been fuelled by illicit trade," he added.

Stoel said BAT recorded a 53.9% share of the legal domestic tobacco market last year and is committed to staying in Malaysia despite having closed down its production factory in 2017.

"An increase in our marketing investment in 2017 versus 2016 shows our commitment to the domestic market," he said.

Stoel also said BAT is considering launching reduced harm products in Malaysia such as its heated tobacco device, glo, which was launched by BAT in Japan.

However, the group is concerned that the regulatory frameworks are not strong or stable enough to support the introduction of new products yet, he added.