Shares in Belgian brewing company Anheuser-Busch InBev
rise 2 percent to lead the Belgian blue-chip index higher, extending gains into a second day after a tax rise in Brazil was unexpectedly delayed.
The stock had risen 1 percent on Monday after Brazilian authorities announced that a planned sector tax rise would be postponed for at least 4 months. AB-Inbev had fallen more than 2 percent late last week.
"You won't have the price increase for the consumer in the short-term, and with InBev being the market leader it would imply that they would come out with a price increase first," Kris Kippers, analyst at Petercam, says.
"So this is clearly a positive in the short-term that will support volumes and which will not lead to market share loss in the short-term."
Demand for the stock is robust at two fifths of the 90-day average traded volume, 50 percent higher than the broader Bel-20 .
"The short term risk in volume evolution in Brazil is diminished with the decision of the Brazilian authorities to delay tax increases for six months," says Wim Hoste, analyst at KBC Securities.
The postponement plays into UBS's decision to upgrade AB InBev to its 'Key Call' list as part of which it affirms its 'Buy' rating on the stock.
"ABI is our top pick in European beverages and has strong appeal in both the short and long-term," the bank's analysts write in a note.
"This is due to positive US shipment growth driving operational leverage, strong price/mix growth, and easier year on year cost comparables in the US and Brazil."
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