Shares in British-American Tobacco rose 22 per cent in the first week of trading after its forerunner, BAT Industries, split its tobacco activities from its financial services interests. The shares were buoyed by a string of favourable recommendations from analysts. The maker of Lucky Strike cigarettes is second only to Philip Morris in world cigarette sales and hopes to overtake it.

"If you gave BAT the same ratios as Philip Morris, BAT would be worth about pounds 8," said Tim Young, an analyst at SG Securities. Freed from its insurance activities, the new tobacco-only company will be able to borrow money more easily to expand its empire.