Proton Holdings Bhd, which was up sharply this morning on news that it is close to forging a partnership with Volkswagen, remained high in the afternoon although Sime Darby denied it is buying Khazanah Nasional Bhd's 43 per cent stake in the national carmaker.
The surge in Proton shares is not a surprise as it is a reaction of investors who now would welcome any partner for the ailing national carmaker after a long and complicated search for a partner to help it to turn around, a dealer noted.
The shares of the national carmaker rose to a high of RM7.05 this morning after reports said Volkswagen is likely to take equity and management control of its key operations.
At 3.56pm, Proton was traded 60 sen higher at RM6.45 while Proton call warrants rose 25.5 sen to 89.5 sen.
The price is still below the RM7.00 - RM9.00 fair value for Proton shares put forward by research houses. For instance, RHB said the fair value for Proton is at RM8.60.
An analyst said investors are generally cautious and awaiting further details considering the difficulty Proton faced in clinching a partnership deal in the past.
According to news report, Volkswagen will acquire a 51 per cent stake in a new company which will hold Proton's assets such as manufacturing, research & development, engineering and also its UK unit, Lotus.
Proton will retain its distribution unit, it added.