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Invesco follows other funds to buy more of Noble after stock dives

Investment funds have bought more of Noble Group after the stock fell to a six-year low.

INVESTMENT funds have bought more of Noble Group after the stock fell to a six-year low. The counter closed lower for a fourth straight day at S$0.695 on Thursday.

Invesco on June 2 acquired 1.18 million shares at S$0.763 each via market transactions to become a substantial shareholder of the commodity group. It now has a stake of 5.01 per cent in Noble, up from 4.99 per cent previously.

On May 29, Prudential also increased its stake to 7.2 per cent, from 6.99 per cent, by buying 14.5 million shares at S$0.787.

The share price has continued to decline amid active trading in the past week. This was despite Noble's founder and executive chairman Richard Elman dipping into the market on four separate occasions in the past two weeks to acquire marginally more of the company. Mr Elman now holds 21.09 per cent of Noble, up from 21.0006 per cent before May 27.

Noble's shares have fallen more than 35 per cent this year, after it came under attack by Iceberg Research for its accounting practices.

The stock came under new selling pressure after Michael Dee, an investment banker and a former senior managing director at Temasek Holdings, rehashed his criticism of the group's lack of transparency in an open memo to Noble's employees last week.

"Only straight answers to simple questions can begin to repair the damage to Noble's share price. Even CIC, Noble's second largest shareholder, has recently sold down their position and your founder originally sold them some of those shares," he said. "Noble must show the market they do not need any spin merchants to explain with clarity your financial statements and how they are prepared."

Mr Dee also recommended that Noble focus on generating positive free cash flow from its operations.