KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Hyundai Motor reported record quarterly profit and revenue on Thursday, driven by strong sales of high-margin cars. The company announced plans to expand its hybrid vehicle lineup in anticipation of potential changes in US electric vehicle (EV) policies following the upcoming election.
Key Highlights:
Record Profit and Revenue:
- Net Profit: Hyundai posted a net profit of 4 trillion won (US$2.9 billion) for the April-June period, up 23% year-on-year and surpassing the 3.4 trillion won average of 21 analyst estimates compiled by LSEG SmartEstimate.
- Quarterly Record: This net profit is the highest quarterly result since the previous record set in Q2 2022.
Sales Performance:
- US Market: Hyundai outperformed rivals by increasing sales of premium SUV models and hybrid vehicles in the US. High-margin SUV sales accounted for about 80% of total US sales, with hybrid vehicle sales jumping 42% year-on-year.
- Domestic Market: In contrast, domestic vehicle sales in South Korea, Hyundai's second-largest market, slumped 10% in the second quarter, following a 16% drop in the previous quarter due to high inflation and a weak economy.
Market Outlook:
- Challenges Ahead: Hyundai warned of an uncertain outlook due to intensifying price competition as inflation and high interest rates squeeze consumers. The company expects increased competition and incentives, creating a tougher business environment.
Hybrid Expansion:
- US Policy Uncertainty: Hyundai plans to expand its hybrid lineup as global demand for EVs eases and uncertainty grows over US EV policies. Former President Donald Trump, the Republican candidate, has criticized current EV policies and suggested he would "end the electric vehicle mandate" if elected.
- IRA Impact: Hyundai CFO Lee Seung Jo stated that even if Trump wins, the Inflation Reduction Act (IRA) is unlikely to be scrapped. However, Hyundai is preparing for possible changes by increasing its hybrid offerings.
Exchange Rate Benefit:
- Favorable Exchange Rate: The won's 4.3% slump against the dollar in the second quarter boosted Hyundai's repatriated overseas sales and profit, contributing to overall profit growth.
Investor Reaction:
- Shares in Hyundai closed down 2.7% before the results were announced, reflecting cautious investor sentiment despite the positive earnings report.
Conclusion: Hyundai Motor's strong second-quarter performance highlights the company's successful strategy in the US market and its proactive approach to potential policy changes. By expanding its hybrid vehicle lineup and maintaining robust sales in key segments, Hyundai aims to navigate the evolving automotive landscape and sustain its growth trajectory.
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