Tuesday, June 8, 2010

Proton continues slide

KUALA LUMPUR: PROTON HOLDINGS BHD [] share price continued to slide for the second day and fell 2% or nine sen to RM4.46 at 9.35am on Tuesday, June 8 after it had said last weekend that talks with German carmaker Volkswagen AG had collapsed as the latter has "other priorities".

On Monday, OSK Research while maintaining its buy call on the stock cut its target price for Proton to RM5.67 (from RM6.94) as it trimmed its PE from 11 times to nine times on FY11 earnings given this negative development and the lack of positive news development over the near term.

Last weekend, Proton confirmed that it had been informed during preliminary talks between them that as such, a potential collaboration with the Malaysian carmaker could not be pursued.

"Proton acknowledges the decision made by Volkswagen. As one of the largest OEMs (original equipment manufacturers), Volkswagen would (have been) an interesting collaboration partner for Proton," Proton said.

There had been speculation since late last month that talks between the two carmakers had collapsed.

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