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Malaysia may raise tobacco taxes 11pc 

The Malaysian government may raise tobacco taxes by at least 11 per cent as it takes steps to discourage smoking and cut its budget deficit, according to Maybank Investment Bank Bhd.

The excise duty on cigarettes may be increased by 2 sen to 20 sen (5.7 cents) a stick when the government unveils next year's budget on October 23, Khair Mirza, a Maybank analyst in Kuala Lumpur, said in a report today. He kept a "neutral" rating on Malaysia's tobacco stocks. . . .

Malaysia will impose a ban on the sale of cigarettes packs of less than 20 sticks in the first quarter of 2010, after making companies put graphic health warnings on all cigarette packs this year, Khair said.

"We expect JTI's prospects to be largely unencumbered by the impending changes," Khair said. British American, which is more reliant on the higher-margin smaller packs, might fare less well, he added.

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