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The report said parties related to the shareholders of both firms were exploring the possibility of ECM being sold to K&N Kenanga.
"Unlike ECM Libra, not all of the substantial shareholders of Kenanga want to exit," said an industry observer.
The report said ECM's single largest shareholder Azman Hashim wanted to sell his 23.5 percent stake in the investment bank.
Azman, who also owns a 16.7 percent stake in Malaysia's fifth-largest bank by assets, AMMB Holdings Bhd , recently rejected market talk that he planned to sell his stake in the lender.
ECM, K&N and Azman were not immediately available for comment.