Investment: View from the City: Brokers Reports

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IMPERIAL TOBACCO

UBS Warburg started telling its clients to buy Imperial Tobacco this week, amid expectations the management will continue its great track record in wringing cost-savings from its acquisitions. It has sealed the purchase of Reemstma, a German firm, which gives Imperial a strong presence in central Europe to add to its position as the leading producer of cigarettes in the UK and the world's largest producer of roll-your-own tobacco and papers. With pounds 170m in annual savings expected from next year because of the deal, Imperial's profit growth looks set to outstrip all its rivals.

MFI FURNITURE

Buying MFI shares at this stage of the economic cycle, with consumer spending likely to slow, may seem odd. But Rowan Morgan at KBC Peel Hunt thinks the business is "sleek and consumer- responsive" enough to survive a dip in consumer confidence, and its finances are sound. He reckons people will spend a greater part of their disposable income on home improvement over the next years, and less on eating out and clothing.

PHYTOPHARM

Phytopharm shares have come under pressure because of disappointing new small print in its big deal with Pfizer, the world's largest pharmaceuticals firm developing the little UK biotech's fat-busting drug. …