Tuesday, December 06, 2011

Proton- trading halted for an hour

When the authority goes strictly by the book, we can get a very silly outcome. Proton's one-hour trading halt for an insignificant announcement today clearly illustrates this point. The company reply to Bursa's query:
We refer to Bursa Malaysia's telephone query on Monday, 5 December 2011 on unusual market activity in relation to PROTON's shares and the Article entitled "Khazanah to invite bids for PROTON" appearing on page 10 of the Edge (week of 5 December 2011 - 11 December 2011).

The Board of Directors of PROTON wishes to clarify that after making due enquiry with the Board of Directors and major shareholders, the Company is not aware of any reason for the unusual market activity in the shares of the Company recently, and further, that there is no material corporate development not previously disclosed. The focus of Management is to improve the performance of the Company and business is as usual.

Was that really helpful? It is a sad commentary that most investors would have exclaimed "Well, Duh??!!!" But, Proton is not any Tom, Dick or Harry? It is our national car company! It is a GLC and one of the biggest investments of Khazanah. The kind of reply given by Proton is no better than what we got from Harvest. The investing public has already been informed through the news media over the weekend that Khazanah, the major shareholder is planning to divest its interest in Proton. Surely, Proton could have given a better reply. If it is beyond its scope to comment on Khazanah's plan, it should ask Khazanah to issue a statement on the matter. The attitude of the Board & management of Proton is absolutely disappointing. This is one more reason why we should sell off this investment & close the chapter on this company that has been a drag on our industrialization program & a burden for all car-owning Malaysians for too long.


Chart: Proton's 5-min chart as at Dec 6, 2011_11.30am (Source: Quickcharts)

Despite the strong rumor that's out there, you may want to be a bit cautious on Proton. Technically speaking, I would not rule out the possibility of Proton closing the gap at RM3.61 yesterday. What could cause such a sharp drop? The answer: Dr. M. As long as he is still around, the sale of Proton- his brainchild- is never a sure-thing. He would fight tooth & nail to cause Khazanah to hold onto this company. However, the rumor that DRBHicom is one of the interested parties may change the whole picture. Is there anything that Syed Mokhtar doesn't want to buy?

5 comments:

Jim said...

Hi Alex,

Can you kindly comment on MUDA?

Thanks.

Alex Lu said...

HI Jimmy Yeoh,

Muda has just broken above the resistance of RM0.92. Its next resistance is at RM1.00 & then RM1.05. below RM0.92, its support levels are RM0.85 & then RM0.80.

The sharp jump is share price is very tempting and yet very tricky. Will there be follow through tomorrow? Who knows?

cheer said...

Hi Alex,

Seek your advice on below 4 plantation stocks

a. SOP
b. TDM
c. TWSPlant
d. TSH

1. Can you advise the best price to enter?
2. What TP you will give base on forecast Q4?
3. Are they currently in correction base on TA?

Digital said...

"The Board of Directors of PROTON wishes to clarify that after making due enquiry with the Board of Directors and major shareholders, the Company is not aware of any reason for the unusual market activity in the shares of the Company recently, and further, that there is no material corporate development not previously disclosed"....

Base on the above reply, all the board of directors not reading news or listening to any news...so what they're doing? The news is all over the place about Khazanah selling their stack and they're not aware. If they dont read the news or unaware of what happening around them, how are they going to improve on the company performance? Somehow the share, of all the sudden receive extra nuclear power to shoot higher. Come on GLCs....we are not a fool.

elizabeth said...

I think it is not just that PLCs' standard answers to UMA queries are appaling, but Bursa's enforcement efforts are their equal match. A mere few days after the 'I dont know anything' response from Harvest court, the company announced the contract from its substantial shareholder. In any case, with weak enforcement by Bursa and SC, investors should stick with stocks with good fundamentals with sound corporate governance practises. If we get burnt by counters like Harvest court, Iris or the likes, we have ourselves to blamed. On Proton, while the divestment may not happen, but the Glenmarie landbank it sits on would certainly be very attractive to DRB.