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.
The founder of SoftBank Group Corp, Masayoshi Son, has seen his fortune shrink by US$2.5 billion (RM11.35 billion) following a significant two-day decline in the company’s stock price. This drop comes as the Bank of Japan’s (BOJ) unexpected interest-rate hike sends shockwaves through financial markets.
.jpg)
Market Reaction
SoftBank's Stock Performance:
- Shares fell 6.7% during morning trading in Tokyo.
- Over two days, the stock has declined by roughly 13%.
- Despite the setback, Son’s net worth has increased by about US$3 billion from the US$11.3 billion he started with at the beginning of the year, according to the Bloomberg Billionaires Index.
Factors Contributing to the Decline
Bank of Japan’s Interest Rate Hike: The BOJ’s earlier-than-expected rate increase has rattled investors, leading to a swift reversal in Japanese stocks. This decision has particularly impacted tech companies like SoftBank, which had been among the top performers in the market.
SoftBank’s Previous Performance: The company had experienced a 46% increase through the end of July, largely due to its substantial stake in Arm Holdings plc, a leading chipmaker. Arm’s shares had risen earlier this year due to optimism about artificial intelligence profits.
Arm Holdings’ Sales Forecast: Arm Holdings’ shares plunged 16% on Thursday after the company reaffirmed its existing annual sales forecast, disappointing investors who had hoped for more optimistic projections.
Impact on Japanese Market
On Friday, Japanese shares experienced their most significant drop since 2020, as the market reacted to tighter monetary policies. The BOJ’s hawkish stance has created turbulence in one of the world’s best-performing markets.
Currency Fluctuations
- Strengthening Yen: The Japanese yen climbed to a four-month high on Thursday after the BOJ’s announcements, adding another layer of risk to SoftBank’s international operations. A stronger yen can negatively impact Japanese companies with significant overseas investments.
Son's Financial Position
Largest Shareholder: Masayoshi Son, aged 66, is SoftBank’s largest shareholder, owning a substantial portion of the roughly US$78 billion company.
Collateralized Stake: Much of Son’s stake in SoftBank is pledged as collateral against loans with various financial institutions, potentially complicating his financial position amid the stock’s volatility.
Conclusion
The recent downturn in SoftBank’s shares underscores the volatility and risk inherent in tech investments, especially in the face of unexpected policy changes. Masayoshi Son’s fortune, while still substantial, highlights the challenges and uncertainties facing major tech investors in today’s market
Comments
Post a Comment