PwC report unlikely to be enough to satisfy market

AFTER an encouraging early bounce to S$0.645, Noble Group's shares on Tuesday finished S$0.01 weaker at S$0.57, a disappointing outcome for those who might have been hoping that a positive assurance report by accountants PricewaterhouseCoopers (PwC) on Noble's accounting practices would have been enough to answer Noble's critics - namely, Iceberg Research, which issued its first critique in February, short-seller Muddy Waters, which emerged soon after, and former investment banker Michael Dee.

It's possible that Tuesday's share price weakness was in line with a fall in the entire market - the Straits Times Index ended a dismal session down almost 1.4 per cent. Or it could be that the reason for the weakness was the second-quarter figures that Noble released together with the PwC report.

But it is just as possible that the share price fall was because the PwC report told the market nothing it did not already know. If so, it suggests that a market which had hoped for answers to questions posed by Noble's critics but did not find them will continue to put pressure on the stock in the days ahead. There are good reasons to think this may be the case.