KUALA LUMPUR: Proton Holdings Bhd’s stock price gained 24 sen or almost 5.3% to close at RM4.77 yesterday. About 4.4 million shares of the national carmaker changed hands, which was relatively high for the counter compared to its usual daily trading volume.

Market talk had it that Proton had firmed up some sort of collaboration deal with Volkswagen AG (VW) of Germany. Details were scarce at press time, but according to auto industry sources, the deal hinged around Proton undertaking contract assembly of certain VW models for the German auto giant, but this remains unsubstantiated.

A couple of weeks ago, The Edge Financial Daily had spoken to Proton’s managing director and he had denied that the national carmaker and VW had finalised a deal, but indicated that talks were ongoing with nothing firmed up as yet. He could not be contacted yesterday.

Over the past three trading days, Proton’s stock price had gained 57 sen or about 13.6%, and at current levels is trading at its highest since November 2007.  

Deputy Finance Minister Datuk Chor Chee Heung had also said in parliament yesterday that the government, through Khazanah Nasional Bhd, was not looking to divest equity in the national automaker, but was in talks with several OEM (original equipment manufacturers) on joint assembly and joint venture possibilities.

State-controlled investment arm Khazanah is Proton’s largest shareholder controlling some 43% of the automaker’s equity.

Interestingly, another automotive player DRB-Hicom Bhd has also seen its share price rising recently. The stock gained 18 sen over the past three trading days (it gained 15 sen last Friday alone), closing at RM1.18 yesterday, up one sen on relatively high volume. The stock is at its highest level since October last year.

Yesterday, about 9.2 million shares of DRB-Hicom changed hands while last Friday about 25.4 million shares were traded, which was considerably higher than the usual trading patterns of the counter.

Talk of the three companies — Volkswagen, Proton and DRB-Hicom — having some sort of working arrangement is not new, having been speculated since last year.

This article appeared in The Edge Financial Daily, March 30, 2010.