KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Nippon Steel, Japan’s largest steelmaker, has increased its full-year profit forecast, citing improved margins in its steel business. The company also expressed confidence in completing its acquisition of US Steel by the end of the year.
Key Financials:
First Quarter Performance:
- Net profit for April-June fell 11% year-on-year to ¥157.6 billion (US$1 billion or RM4.57 billion).
- The profit exceeded analyst expectations of ¥108.7 billion, according to LSEG data.
Full-Year Forecast:
- Nippon Steel raised its net profit forecast for the fiscal year ending March 2025 to ¥340 billion, up from ¥300 billion.
- Despite the increase, the forecast is below analysts’ estimate of ¥372.6 billion.
Strategic Insights:
Market Conditions:
- Vice Chairman Takahiro Mori acknowledged the unprecedented slump in steel demand but highlighted successful restructuring efforts, including plant closures.
- The company anticipates improvement in its steel business despite challenging market conditions.
US Steel Acquisition:
- Nippon Steel confirmed its US$14.9 billion acquisition of US Steel, announced last December.
- The company received a second request for information from the US Department of Justice as part of the deal's regulatory review.
Regulatory and Political Challenges:
- While approvals have been secured outside the US, the deal faces opposition from US regulators and the United Steelworkers (USW) union, which is concerned about potential job losses.
- Mori emphasized that the company is committed to no job cuts, no production transfers overseas, and no plant closures after the current USW agreement expires in September 2026.
Strategic Partnerships:
- Nippon Steel hired former US Secretary of State Mike Pompeo to assist in navigating the deal's political landscape.
- Mori stated that Pompeo’s involvement strengthens their position, as he is respected by both major political parties in the US.
Outlook:
- Future Prospects:
- Nippon Steel remains optimistic about closing the US Steel deal by year-end, citing positive engagement with stakeholders.
- The acquisition is positioned as beneficial for the US economy, regardless of the political climate.
Nippon Steel is advancing its strategic initiatives to enhance profitability and expand its global footprint through its acquisition of US Steel, while addressing regulatory and political challenges to ensure the deal's success.
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