KUALA LUMPUR (Oct 17): British American Tobacco (Malaysia) Bhd which carries a portfolio of well known cigarette brands in Malaysia such as Dunhill , Pall Mall and Kent saw its share price increase by 56 sen or 1.7% this morning to RM33.78, as news reports point to hike in retail prices for all cigarette brands next month.

Bernama quoted Health Minister Datuk Seri Dr Dzulkefly Ahmad yesterday as saying in Parliament that the prices of tobacco products, including cigarettes, have to be increased following the nationwide shift to the sales and services tax (SST) on Sept 1.

The recent implementation of the SST will cause the prices for all types of tobacco products, including cigarettes, to be increased,” he said in the report. On Oct 5, Dzulkefly reportedly said the potential price increases would be RM1.30 for imported cigarettes and 90 sen for local cigarettes.

CIMB Research in a note yesterday said that the Ministry of Health’s announcement of a price hike for cigarettes is a neutral development, given that BAT should eventually hike its cigarette prices after the SST kicks in.

“Our financial years ending Dec 31, 2018 to 2020 ( FY18-FY20) forecasts have included a 50-sen pack increase. Our sales volume forecasts are unchanged pending the finalisation of the quantum of increase,”the research firm said.

At 10.30 am, BAT shares retreated slightly to RM33.68, with 27,000 shares traded.