All good things must come to an end, goes an old idiom. Investors in big tobacco groups are finding this out the hard way as the reality of a multitude of daunting challenges hits home. The share prices of big tobacco groups began nosediving in June last year. The price in sterling of the world’s largest tobacco group by revenue, London Stock exchange-listed British American Tobacco (BAT), has plunged 35%, with a similar fall on the JSE, where it has a secondary listing. The share price of BAT’s closest rival, New York Stock Exchange-listed Philip Morris International (PMI), has also dropped 35%. This marks a major reversal of the bull run big tobacco groups enjoyed in the wake of the 2007/2008 equity market collapse. Investors who climbed aboard what were perceived to be safe-haven, noncyclical stocks in 2009 went on to be hugely rewarded later. At its best BAT’s share price had risen almost 200% from its 2009 low. Its rise on the JSE was an even more spectacular 390%, thanks to a ...

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