Lesson from Invesco's Noble strategy

THE article "Invesco follows other funds to buy more of Noble after stock dives" on June 5 discussed how on June 2, Invesco bought 1.18 million shares of Noble Group at an average price of S$0.763 This allowed Invesco to report that it was now a substantial shareholder of Noble with holdings over 5 per cent. Such statements are important signals of confidence to smaller investors who often look to these substantial shareholders.

However, what was not reported was that the very next day Invesco sold over 10 times what it bought the day before. On June 3, Invesco sold 12.8 million shares of Noble at an average price of S$0.7276, reducing its stake to 4.8 per cent. This was clearly a more important sell signal than the buy signal reported in BT.

It is worth noting that Invesco lost money on the purchase that it sold the next day. Since when is buy high sell low an investment strategy? Could it be that the 1.18 million shares purchased was meant to improve the Noble market price and entice investors to buy thereby making it easier to sell the 12.8 million shares the next day?