StarBiz reports Proton shares have dropped from RM8.35 to RM7.90, making it the second highest loser on the Bursa Malaysia yesterday.

Traders was worried by the announcement that Proton was interested in buying two Volkswagen platforms to rush out the production of 2 new cars to curb falling sales. They said it made no sense for Proton to buy the platforms since they were heading for a technical collaboration or stake transfer in the first place. This implicated the collaboration might not happen.

HLG Research has flagged Proton shares as buy, as these shares are expected to soar up later if any announcement / further development of an alliance with Volkswagen AG.

HLG analysts also believe that the Q1 loss is partly caused by MV Augusta, which is expected to turn around only in 2007. The report also said Proton also carried 30,000 cars in stocks (these are the ones you see in photos of Proton stockyards) which would affect earnings if not cleared by year-end.

Source: Forbes, StarBiz