A week ahead of its third-quarter trading statement SABMiller could do with some support. The start of 2013 went well for the international brewer, as shares shot up from 2862p all the way to year-highs of 3683p in the second week of May. Subsequently it traded in a range from 2960p to just above 3300p for the following seven months of the year. The 8% return on shares over the year in isolation would be regarded as very good, but against the back drop of the FTSE increasing by 10.5% it is a little less impressive.
At the start of 2014 it finds itself just bobbing above its six-month lows, in desperate need of some good news to create a more positive sentiment.
The market perception of brewers is that they fit into the more defensive portfolios as they tend to have a loyal user base and a sector that becomes more heavily used during economic hardship. It has been in the developing regions that strength has been shown over the last three years, rather than in the more mature western markets. European revenue has fallen by 8.26% while Latin American revenue has increased by 9.89%
Traders will be monitoring the shares; any break below current levels could see fresh six-month lows squeezed lower. The 2960p level still looks to remain the key.