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 clea…