KUALA LUMPUR: British American Tobacco (BAT) emerged top loser as its share price fell as much as 50 sen to RM62 after the company raised its cigarette price.

The increase is effective from today.

Yesterday, BAT announced it was raising its cigarette prices by RM1.50 for the 20-stick pack, both for its premium and aspirational premium-brands, respectively.

BAT's brands include Dunhill, Pall Mall, Kent and Peter Stuyvesant.

Kenanga Research said it understood that the price increase came in response to a 14 per cent excise duty hike. It brought the total excise duty per box of 20 sticks to RM5.

"Although BAT has been making good progress in strengthening its market leadership over the years, the overall legal market consumption has been declining due to increasing competition from illicit white cigarettes.

"Should this trend continue, BAT's domestic volume could be affected further, despite ongoing efforts to diversify the group's exposure in the fast-growing contract manufacturing segment," it said in a research note today.

The research house maintained a "market perform" call on BAT and raised its target price to RM63 from RM61.36, previously.

Meanwhile, HLIB Research in its note said the price hike announcement turned out to be a negative surprise and the move is the third over the last two years.

In June this year BAT announced a three per cent increase in cigarette prices citing rising operating costs.

"We believe the price increase would result in a larger impact towards BAT's cigarette volume as the hike is much steeper compared to previously," it added.

The research house maintained a "hold" call on BAT with a target price of RM59.86. -- BERNAMA