The warm glow of market sentiment usually reserved for highly profitable cigarette giant British American Tobacco (BAT) has been unceremoniously stubbed out. BAT’s shares on the JSE shed more than 9% in the two days after the US Food & Drug Administration (FDA) proposed drastically reducing the amount of nicotine in cigarettes to "nonaddictive levels". FDA commissioner Scott Gottlieb said 480,000 Americans die every year due to their addiction to cigarettes — "the only legal consumer product that, when used as intended, will kill half of all long-term users". But the stock slide was severe for the company, which, with a market capitalisation of R2.03 trillion, is the second-largest on the JSE after AB InBev (R2.69 trillion) — especially as BAT has been typecast as a defensive stock since it listed in 2008, and thus supposedly immune to such swings. At the time of writing, BAT’s share price had shown only a modest recovery, as analysts struggled to get a sense of what Gottlieb’s rule...

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