OCBC Investment Research ceases coverage of Noble Group

OCBC Investment Research (OIR) is ceasing coverage of Noble Group, the research house said in a note on Monday.

OIR's analysts, Carey Wong and Andy Wong, noted the commodity trader's one-for-one rights issue and the impending departure of the group's chairman, Richard Elman.

Mr Elman had given an irrevocable undertaking to procure subscriptions for 625.5 million rights shares, representing 9.6 per cent of the maximum number of shares to be issued.

"...given his commitment to subscribe for the rights, we believe Elman is just placing Noble into the hands of professional managers," the analysts said.

"Still, the news which comes so soon after the departure of CEO Yusof Alireza earlier last week could raise some uncertainty over the company's direction in the near term."

Noble's rights issue will comprise one rights share for every one Noble share, issued at S$0.11 apiece. This marks a 63 per cent discount to the group's closing stock price of S$0.30 on June 2.

"As the company will continue to prune and restructure its business to improve its liquidity profile, we believe it may take a while for the dust to settle, and until then, we may have limited clarity. Hence, we are ceasing coverage," the OIR report concluded.

As at 2.36pm, Noble's counter was the most actively traded one on the Singapore Exchange, having shed 9.6 per cent to S$0.235, with more than 125 million shares changing hands.