Noble Group extends worst rout since 1999 amid SGX warning

[SINGAPORE] Noble Group Ltd plunged to extend its biggest monthly drop in 16 years after the Singapore bourse issued a warning on the company's shares amid a slump in commodity prices.

The trader sank 12 per cent to 46 Singapore cents in volume more than five times the three-month average as of 4:06 pm local time, heading for its lowest close since October 2008. The shares are down 39 per cent in July, after falling every month since December, as a group calling itself Iceberg Research published criticism of the firm's accounting. Noble has rejected the criticism and hired PricewaterhouseCoopers LLP this month to review its practices.

A 12 per cent drop yesterday prompted the Singapore Stock Exchange to ask if Noble knew of any reason for the move and warn investors to exercise care when trading the shares. The bourse said the stock has seen three instances of "unusual trading activities" in the past six months.

"Some people may be spooked by the 'Trade With Caution' notice," said Carey Wong, an analyst with Oversea-Chinese Banking Corp. There is also negative sentiment about commodity stocks, he said.

A representative of Noble Group said the company couldn't comment. The Bloomberg Commodity Index fell 10 per cent in July, the most since September 2011, after sinking to a 13-year low.

Noble has bought back its stock at least 11 times since last month and built up a 2.8 per cent stake from zero. Two weeks before reporting earnings, companies listed in Singapore aren't allowed to repurchase their shares, according to Singapore exchange rules. The company is due to report its quarterly results on Aug 13.

"The share buybacks so far have been relatively limited so we don't expect immediate impact on the company's liquidity or financial leverage," Cindy Huang, an analyst with credit-rating agency Standard & Poor's, said by e-mail.

Noble's stock declines do not in themselves impact the trading company's credit position, Ms Huang said.

"The larger issue would be if confidence is affected or lenders' sentiment is significantly affected," Ms Huang said.

BLOOMBERG