Noble needs to listen and communicate more effectively

WHICH way will shares in Noble Group swing next now that the stock has sunk to an 11-year low? Six months after the commodities group's accounting practices first came under attack by a little-known entity, the answer to this question remains anybody's guess. Even as questions about whether the trading house will become insolvent creep into the market, much of its future will depend on how effective its communication strategy is.

Noble's shares posted its first gain in seven days on Wednesday (see chart), edging up one cent to 42.5 Singapore cents as 153.8 million shares changed hands. This follows a 9 per cent plunge in its share price on Tuesday, after first rising in early morning trade.

Market observers say the stock's increased volatility has prompted brokerages to take risk management measures and impose trading restrictions on Noble. Phillip Securities has restricted online trading of the stock; CIMB requires upfront cash for purchases of more than S$200,000; and UOB Kay Hian is asking for a 50 per cent downpayment for trades above S$50,000.