(Updates with closing share price in second paragraph.)
Oct. 28 (Bloomberg) -- Komatsu Ltd., the world’s second- largest construction machinery maker, rose to the highest in almost two months in Tokyo after saying it would buyback as much as 30 billion yen ($395 million) of shares.
The shares climbed 5.6 percent to close at 2,023 yen, the highest since Sept. 2. The benchmark Nikkei 225 Stock Average added 1.4 percent.
Komatsu, which makes excavators, wheel loaders and bulldozers, will buy back as much as 1.65 percent of its shares outstanding between Nov. 7 and Dec. 28, it said yesterday, after the market closed. The company cut its full-year profit forecast by 7 percent yesterday as sales in China dropped and the yen’s appreciation curbed overseas earnings.
“The announcement of the share buyback plan helped boost the shares,” said Yoku Ihara, an investment adviser at Retela Crea Securities Co. in Tokyo. “Investors concluded Komatsu’s earnings will remain solid because falling Chinese sales are being covered by other markets, even after the company cut its profit forecast yesterday.”
Full-year profit will be 186 billion yen, the Tokyo-based company said after reporting an 18 percent gain in second- quarter profit.
--Editors: Rebecca Keenan, Andrew Hobbs
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