Noble climbs to one-month high as supply cuts spur commodity surge

[SINGAPORE] Noble Group Ltd. tracked raw material prices higher, extending the biggest advance in more than nine weeks, amid speculation commodities have bottomed.

The stock rose as much 13 per cent to 53 Singapore cents on Monday, and traded at 52.5 cents at 12.22pm in Singapore, the highest level since Sept 9.

About 116 million shares changed hands, 153 per cent more than the three-month average, according to data compiled by Bloomberg.

Noble jumped 16 per cent on Friday, the most since August 4, as the commodities trader was said to be overhauling its metals unit.

Raw materials as measured by the Bloomberg Commodities Index advanced 3.6 per cent last week, the most since July 2012, fueling gains in related equities.

While prices have slumped 23 per cent in the past year, Pacific Investment Management Co said the worst of the collapse is probably over.

Investors have shunned companies linked to commodities amid faltering demand in China, the biggest buyer of metals and energy.

"We're probably seeing some short-covering," Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. "Noble has fallen quite a lot and would have found a bottom for the time being. It all depends on the outlook for commodities."

The Bloomberg Commodities Index climbed 0.7 Friday, led by a 10 per cent surge in zinc after Glencore Plc said it plans to cut production of the metal used to galvanise steel by about a third. The gauge rose 0.3 per cent Monday.

Noble, the worst performer on the benchmark Straits Times Index, is still 54 per cent lower this year after Iceberg Research and short-seller Muddy Waters LLC questioned its accounting policies.

Short interest as a percentage of outstanding Noble shares climbed to record of 15.1 per cent on Thursday, according to Markit Group Ltd data tracked by Bloomberg.

BLOOMBERG