STOCKS NEWS EUROPE-Heineken hit by UBS downgrade of its holding

Shares of Heineken (HEIN.AS), the world's third largest brewer, drop after broker UBS downgrades its rating for Heineken Holding (HEIO.AS) to 'sell' from 'neutral'.

Heineken NV is down 1.3 percent and Heinken Holding falls 1.4 percent, while the STOXX European food and beverage index .SX3P is 0.3 percent higher.

UBS says this reflects the fact that the holding is trading at a reduced discount to Heineken NV of 11 percent from 16 percent six months ago and an average of 13 percent over the past two years. A discount is justified on the basis of the holding's lower liquidity and absence from major indices.

UBS cut Heineken NV to a 'sell' last October on the view that its faces greater pressure than rivals in western Europe, where it is the market leader, even though it has expanded its emerging market presence.

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