Talk about the pause that refreshes. UK-listed Coke bottler CCH pleasantly surprised the markets with its results last week offering an optimistic outlook for 2016. CCH shares, at one point down 15 per cent this year, have recovered completely.
Earlier doubts about CCH flowed from its emerging market exposure. Half of its volumes are sold in these economies. Almost a third come from Russia and Nigeria, where falling oil prices are weighing heavily. CCH’s Russian volumes have begun to fall.
Black markets for the naira suggest a 50 per cent devaluation. According to CCH’s estimates, if the Nigerian currency fell that much its net profits would be hit by 15 per cent. Still, CCH says its “established” markets in Europe (think Italy and Switzerland) are doing well, and price increases are on the horizon.