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Hot stock update: Noble gains despite being dropped from STI

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Shares of commodities firm Noble Group rose on Friday amid heavy trading, despite it being stripped from the list of constituents that make up the Straits Times Index (STI).

SHARES of commodities firm Noble Group rose on Friday amid heavy trading, despite it being stripped from the list of constituents that make up the Straits Times Index (STI).

Noble closed four Singapore cents or 10.5 per cent higher at S$0.42. It was the most actively traded stock with some 219 million shares changing hands.

By March 21, Noble will be replaced in the FTSE STI by CapitaLand Commercial Trust, following the quarterly review.

"While some professional fund managers track the STI and often replicate the basket, we do not expect the replacement to have a significant impact on Noble," said OCBC Investment Research analyst Carey Wong in a report.

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"Instead, we believe that the more pressing matter for Noble is to regain investment grade for its credit rating." The brokerage has a "hold" on the stock with a target price of S$0.39.

A Business Times commentary on Friday said the next hurdle for Noble lies in its refinancing of its revolving credit facility. Noble said earlier it has agreed on the terms with a group of core banks and is now moving to close the transaction.

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