Hot stock: Noble shares surge nearly 4.3% in trading; group welcomes MAS review

SHARES in Noble Group gained 4.5 cents or 4.29 per cent to trade at S$1.095 on Wednesday morning after the commodity trading firm defended itself against allegations that it used aggressive accounting to mislead investors.

The stock, which opened at S$1.055, was the most heavily traded one by volume, with more than 21.2 million shares changing hands by 10.15am.

Iceberg Research on Sunday published a report which highlighted Noble's treatment of certain companies - such as Yancoal - as associates, claiming this "grossly overstated" the value of these companies. The report caused Noble's market value to slump some S$1.05 billion over Monday and Tuesday.

On Wednesday, Noble also said that it will fully cooperate with, and fully supports, an investigation by the Monetary Authority of Singapore (MAS). This comes after a media report said that MAS was reviewing Iceberg's report. "MAS will take appropriate action if there are breaches of the Securities and Futures Act," MAS was quoted as saying in the media report.

On Tuesday, Noble issued a statement addressing some of the statements in Iceberg's report, where it pointed out that it reports its results in accordance with International Financial Reporting Standards. In addition, it emphasised that its annual financial statements for 2013 and prior years had been audited by Ernst & Young, which issued unqualified opinions.

"The reasons why the group categorizes investments such as Yancoal and others as associates have been clearly disclosed in our annual reports," Noble said. "Supporting factors include board representation, material transactions between the group and the investee as well as the provision of essential technical information."