BUZZ-Diageo: glass half full

** Diageo (LSE: DGE.L - news) appearing in sell-side shopping lists compiled after broad market meltdown triggered by concerns over growth in China

** RBC Capital Markets -- 5 stars for rating accuracy on Diageo by StarMine -- & Morgan Stanley both positive on stock

** China/EM small markets for Diageo (Amsterdam: DO8.AS - news) -- RBC (Other OTC: RBCI - news) says 43% EM sales last yr and, it estimates, 25% of operating profits -- yet stock a top FTSE 100 faller in last month (down 10%, 18th worst off) & oversold (14-day RSI at 24)

** RBC flags self-help & cash flow potential as reasons to buy stock

** MS likes improving momentum, particularly in the US (45% of EBIT) and India, and strong portfolio of brands with high barriers to entry and scale benefits

** China's downturn and global market turmoil have created fresh uncertainty as to whether central banks will keep interest rates on hold for longer

** Diageo a bond proxy (div yield 3.4%) & its income premium would be hit by prospective interest rate/bond yield rise (RM (LSE: RM.L - news) : tricia.wright1.thomsonreuters.com@reuters.net)