Detroit: General Motors, the automaker one-third owned by the US government, rose 2 per cent after analysts at JPMorgan Chase and Barclays recommended buying the shares 40 days after trading began.

Analysts at Bank of America, Morgan Stanley, Citigroup, Royal Bank of Canada and Credit Suisse Group also yesterday advised buying shares of Detroit-based GM, which raised more than $20 billion (Dh73.44 billion) through an initial public offering of common and preferred shares last month.

Chief Executive Officer Dan Akerson, who led GM through the IPO 16 months after it emerged from bankruptcy, has said the automaker can make "significant" profit amid US sales about 30 per cent below the 16.8 million unit annual average from 2000 to 2007. Sales may rise to 12.9 million in the US next year, Michelle Krebs, a senior analyst at Edmunds.com, said yesterday in an interview with Pimm Fox on Bloomberg Television.

"As the economy improves, the auto market will pick up and investors are going to boost exposure in the industry," said Walter Todd, who helps manage about $900 million (Dh3.3 billion) at Greenwood Capital Associates in Greenwood, South Carolina.

GM rose 72 cents, or 2.1 per cent, to $35.32 in New York Stock Exchange composite trading yesterday. The shares have gained 7 per cent from the start of trading on November 18.

Tax assets

GM is on a path to earn $5.9 billion of earnings before interest and taxes in North America this year, Brian Johnson, an analyst at Barclays Capital in New York, wrote in a research note. Ebit in North America was $4.94 billion through September 30.

Deferred tax assets that stayed with GM through bankruptcy are worth $9.18 per share, wrote Adam Jonas, a New York-based analyst at Morgan Stanley.

The assets were accumulated in part as predecessor General Motors lost $82 billion from 2005 to 2008, and they may allow GM to avoid paying US cash taxes until 2018, Jonas wrote.

Of 14 analysts surveyed by Bloomberg, 10 have a "buy" rating on the shares, and four rate GM "hold."

Trading of GM options rose to almost double the four-week average, with volume for calls to buy the stock changing hands 2.7 times as much as puts to sell.