KUALA LUMPUR(Jan 16): UMW Holdings Bhd (fundamental :2.2; valuation : 1.2 ) saw its shares slide as much as 2.07 % or 22 sen to RM10.40 on a weaker ringgit against the USD, which at the time of writing was trading at 3.5675 against the greenback.
The counter was also one of the top losers on Bursa Malaysia this morning.
An analyst with a local investment bank told theedgemarkets.com that the fall in the share price of UMW, which manufactures, market and distributes Toyota vehicles can be correlated to the weak ringgit.
“This is because UMW imports its parts for the manufacturing of Toyota vehicles in USD, therefore the weak ringgit will definitely have an impact on its cost lines,” he said.
He added that the weakening ringgit against the Yen, which at time of writing was trading at 0.0307 against the Japanese currency, would impact the component costs of Perusahaan Otomobil Kedua Sdn Bhd(Perodua) in which UMW has a 38% stake.
“About 15% of Perodua’s component costs are transacted in Yen,” he said.
At 11.24 a.m, UMW shares had fallen by 0.75%, or 8 sen to RM10.54, with 442,600 shares exchanging hands.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)