KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Shares Rebound After Suspension
Dongfeng Motor Group Co. surged as much as 69% to HK$10.10 in Hong Kong on Monday, the steepest jump in six months, after trading resumed following a two-week halt. The rally came on the back of long-awaited restructuring plans involving a privatization and spin-off listing of its luxury EV unit, Voyah.
Transaction Details
Privatization Offer: Shareholders will receive HK$6.68 in cash plus 0.3552608 Voyah H-shares for each Dongfeng share.
Implied Value: HK$10.85 per share, according to company filing.
Voyah Listing: Aimed at unlocking value in Dongfeng’s luxury new-energy vehicle (NEV) business, with the spin-off designed to highlight growth potential in China’s booming EV sector.
Strategic Rationale
Valuation Gap: Dongfeng has consistently traded at a steep discount to book value. Analysts note its cash and equivalents nearly double its market cap, underscoring significant hidden value.
Government Backing: The move aligns with China’s State Council directive in March supporting industry overhauls at major state-owned automakers, including Dongfeng, to drive consolidation and global competitiveness.
Unlocking Growth: Isolating Voyah’s EV business from legacy operations should make its growth story clearer to investors, potentially attracting higher multiples.
Analyst Commentary
JPMorgan (Nick Lai & team):
“The proposed transaction is clearly a move to unlock the hidden value of the company.”
“Dongfeng has been undervalued relative to fundamentals, and this restructuring could serve as a catalyst for rerating.”
Investment Implications
Equity Re-Rating: Immediate share price surge suggests investors see the privatization and Voyah spin-off as a value-unlocking event.
Sector Impact: Reinforces Beijing’s support for restructuring state-owned automakers, potentially setting precedent for peers.
Key Risks: Execution of the Voyah listing, EV demand sustainability in a competitive Chinese market, and timing of restructuring completion.
Bottom Line
Dongfeng’s privatization and EV spin-off plan marks a transformational shift, with government backing and clear value-unlocking mechanics. While near-term share performance reflects strong optimism, investors should closely monitor Voyah’s listing trajectory and EV market dynamics as key determinants of long-term upside.
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