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.
Toyota Motor Corp reported a 17% increase in quarterly profit, driven by a weaker yen and strong sales in North America. The Japanese automaker's performance is offsetting sluggish demand in Japan and China.
Key Financials:
- Operating Profit: Toyota's operating profit for the April-June period was ¥1.31 trillion (US$8.7 billion or RM39.98 billion), up 17% from a year earlier. This was close to the ¥1.32 trillion projected by analysts.
- Revenue: Revenue for the quarter rose 12% to ¥11.8 trillion.
- Fiscal Year Forecast: Toyota maintained its operating profit forecast for the fiscal year at ¥4.3 trillion, with revenue expected to be ¥46 trillion.
- Projected Record Profit: Analysts expect Toyota to post a record profit of ¥5.3 trillion this year.
Market Performance:
- North America: Hybrids are performing well, contributing to robust sales in the region.
- Japan and China: Demand is sluggish, partly due to recalls of the Prius and other models, as well as competition from electric vehicle (EV) makers like China's BYD Co.
- Global Sales: Toyota's global sales fell 4.7% to 5.2 million units in the first half of 2024.
Strategic Outlook:
- EV Goals: Toyota aims to sell 1.5 million battery EVs annually by 2026 and 3.5 million by 2030. Despite the rebound in hybrids, Toyota has no plans to shift its EV strategy.
- Certifications Issue: Toyota received a corrective order from Japan's Transport Ministry for improperly testing seven car models for mass production. This is part of ongoing scrutiny following fraudulent behaviors at Toyota subsidiaries.
Stock Performance:
- Share Price: Toyota's shares fell about 9% in late afternoon trading in Tokyo, influenced by a broader sell-off in the Tokyo Stock Exchange.
- Market Sentiment: Traders are adjusting to potential rate hikes by the Bank of Japan (BOJ), which raised interest rates to 0.25% on Wednesday.
- Currency Impact: Investors are considering the risk of a stronger yen as the BOJ normalizes its monetary policy.
Analyst Insights:
Tatsuo Yoshida, Bloomberg Intelligence: "Quarterly results were no surprise, but there were expectations that Toyota would raise its full-year forecast. It depends on second-quarter results, but there’s a high probability it will be revised during the first half of the fiscal year."
Takehiko Masuzawa, Phillip Securities Japan: "Investors have to price in the risk of a stronger yen going forward. With downward pressure from the currency move and the sell-off in Japanese equities, it’s difficult to buy the stock unless its earnings look favorable."
Conclusion:
Toyota's quarterly performance reflects a balance between strong sales in North America and challenges in other markets. The company continues to focus on its long-term EV strategy while navigating market and regulatory challenges. The impact of currency fluctuations and interest rate changes will be key factors in its future financial performance.
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