Noble plunge leads to SGX 'caution' call
Singapore
SHARES in Asia's biggest commodity trader, Noble Group, sank to a low of 50.5 Singapore cents on Thursday before closing at 52 cents, down seven cents or 11.9 per cent.
Noble was the third most actively traded stock by volume on Thursday as 138.42 million shares changed hands. Thursday's price was the lowest that the stock has plunged to since around November 2008, prompting the Singapore Exchange to issue a query - the third in six months - and a subsequent "trade with caution" notice after Noble said in its reply that it was not aware of any reason that could explain the unusual price fall.
The stock price has more than halved since mid-February, after little-known firm Iceberg Research fired the first salvo by calling the group's accounting practices into question. Noble, however, has denied these allegations.
In recent weeks, the group has been buying back its shares to bolster its price. A Bloomberg report highlighted that the group has spent S$131 million in the past seven weeks to acquire a 2.8 per cent stake via the open market by snapping up 191.8 million shares.
Meanwhile, Standard & Poor's Ratings recently revised its outlook on Noble to negative from stable.
"Despite all the buybacks, the stock continues to fall," CMC Markets strategist Nicholas Teo was quoted as saying by Bloomberg. "Investors are concerned about the outlook for commodities and the impact the buybacks might have on the company's balance sheet."
Noble will be releasing its Q2 results on Aug 13, which means that it will not be able to repurchase shares for two weeks before its earnings are released, in line with a requirement of the Securities and Futures Act.
In addition to its usual conference call, Noble plans to hold a follow-up Investor Information Day, to address questions with regards to its businesses as well as the findings of a PricewaterhouseCoopers (PwC) Assurance Review. PwC was commissioned to conduct a third-party review of its marked-to-market models, valuations and governance framework by an independent board committee set up by Noble.
