Hot stock: Noble Group shorts advance to record as company defends finances

[SINGAPORE] Short interest on Noble Group Ltd shares surged to a new high this week on the day that Chief Executive Officer Yusuf Alireza defended the finances of Asia's biggest commodity trader to investors.

Short interest as a percentage of Noble's outstanding shares climbed to 14.15 per cent on Monday, based on the latest available data from Markit Group Ltd tracked by Bloomberg. Mr Alireza led Noble executives in a five-hour investor meeting in Singapore the same day.

Noble's shares have slumped more than 60 per cent since February when its accounting methods first came under attack by a group called Iceberg Research. Since then, profit has been hurt by the slide in global commodity markets, the company's credit outlook has been cut to negative and its bonds are trading below prices typical of an investment grade issuer.

"The collapse in the Noble shares and spiking credit default swaps are getting investors really nervous," Nicholas Teo, a strategist at CMC Markets in Singapore, said by phone. "This could trigger more margin calls. That's spurring short sellers to intensify their attack." The stock rose 3.6 per cent to 43 Singapore cents as of 9:02 am in the city-state, the first gain in seven days.

Noble pledged to investors Monday to boost operating profit to more than US$2 billion in the next three to five years from US$1.49 billion in 2014. Alireza also said in an interview with Bloomberg Television on Tuesday that the pressure has made Noble a better company, and that it wants to continue as a publicly traded entity.

BLOOMBERG