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.
Last week, we met with Berjaya Auto (BAuto)’s Director, Dato’ Francis Lee and also visited Inokom Corporation (Inokom) in Kulim, Kedah . Inokom is the contract manufacturer of various marques including Mazda vehicles. Currently, BAuto owned 29%-stake in Inokom. At Inokom, we were taken on a tour around the assembly facilities of Mazda vehicles. Key takeaways from the meeting are (i) opportunity to improve export market, and (ii) more room for growth in the Philippines market in the medium term. However, we cut our FY16-17 earnings forecast by 3%-6% due to the revision in our assumption for JPY currency rates. Nevertheless, we are still positive on BAuto as we believe it should perform better than its peers in terms of earnings growth due to a more superior margin, stable dividend payout and net cash position. Our Outperform call on BAuto is maintained at a revised target price of RM2.58 (previously RM2.65) pegged to 13x FY17F. Opportunity to improve export market. Since June 201...