The investment bank UBS has upgraded the UK-based brewer SABMiller to 'buy' from 'neutral'.

In a research note, the bank said that two thirds of SABMiller's total volume comes from emerging markets, with some 56% EBITA coming from low volume growth markets, namely South Africa and the US.

UBS said it believes the group's mix improvements and real pricing in these markets, alongside underlying growth in Europe, Africa and Asia can drive annual growth of 12% in EBITA from 2003 to 2007.

As a result of this increased margin assumption, UBS aloso upgraded its EPS estimates by 4% for 2005 to 92.8 US cents and by 7% for 2006 to US$1.03.