Short-sell attacks likely to have less impact as market learns and adapts

WHEN Iceberg Research last week said in a 17-page report that Noble Group's shares were worth only 10 cents at a time when the price was S$1.20, there were worries that the market could see a repeat of November 2012 when Olam International came under attack from Muddy Waters.

This was because Iceberg likened Noble's accounting to that practised by the infamous Enron, which if proven accurate, could be disastrous to Noble shareholders. So it was that another Olam-type scenario could have unfolded in which the short-selling target's shares collapse and remain depressed for months thereafter amid plenty of corporate histrionics and back-and-forth finger pointing.

Instead, Noble's shares came under pressure for only two days and have since managed to recover 3.3 per cent in the past two trading sessions, including a rise on Monday when the Straits Times Index dropped 0.4 per cent.