DEFENSIVE STOCKS are showing signs of life after underperforming for the past six months, notes Salomon Smith Barney, which thinks that the water, electricity and tobacco sectors might well have been oversold as investors made a dash for cyclical stocks.
Salomon names Scottish Power, Scottish & Southern, BG and National Power as preferred utility stocks while BATs and Imperial Tobacco are its preferred tobacco stocks, despite caution over US litigation and bootlegging in the UK.
BSkyB's DECLARATION of war in the pay-TV market, with its initiative to provide customers with free set-top boxes, does not provide enough upside potential with acceptable levels of risks for Lehman Brothers, which predicts underperform (607p) on the shares. It questions why BSkyB is being so aggressive if its digital launch was so successful, worrying that it might not hit its target of six million subscribers by 2003. It predicts the shares will trail by 10 per cent this month and by 5 per cent over the next three.