DRB Hicom up 5% on hopes of government support

Kuala Lumpur

SHARES of DRB-Hicom Bhd rose 5 per cent on Monday to RM1.11 (S$0.38), as investors bet that the government would give its loss-making automotive unit Proton Holdings up to RM3 billion in soft loans and grants.

The likelihood of both companies being handed a lifeline is based on the recent assurance by international trade minister Mustapa Mohamed that "the government remains committed to ensure the continuous growth and development of the automotive industry which would include the transformation of Proton and its ecosystem".

These developments follow Prime Minister Mahathir Mohamad's resignation as Proton chairman last week.

In a statement on Friday following this move by Putrajaya's biggest critic, Mr Mustapa pointed to Proton's numerous problems, including its lack of capital resources and economies of …