Noble Group surges amid speculation of stake build

Noble Group surges in Singapore with shares heading for the highest close since May.
Noble Group surges in Singapore with shares heading for the highest close since May.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - Noble Group, the commodity trader that's struggling for survival after a multiyear stock rout, losses and concerns it may default, surged in Singapore, with the shares heading for the highest close since May amid speculation that an investor may be building a stake.

Stock in the Hong Kong-based company advanced as much as 38 per cent to 65 Singapore cents and traded at 62.5 cents at 4:36 p.m. local time. While the company is rebounding from an intraday low of 28.5 cents on June 6, it's still lost more than 60 per cent this year.

While the company is rebounding from an intraday low of 28.5 cents on June 6, it's still lost more than 60 per cent this year.

The jump prompted a query from Singapore Exchange.

In response, the company said that it wasn't aware of any information not previously announced that might explain the trading.

Noble Group is searching for a strategic investor to restore confidence after the collapse in its shares and bonds, and last month it reached an agreement with core banks to extend a key credit facility for 120 days. Goldilocks Investment, an Abu Dhabi fund, is among the company's new holders after building up a 5 percent stake over two days in June.

"We can't rule out the possibility that some big players are probably accumulating the shares," Margaret Yang, a strategist at CMC Markets, said by phone. "But usually they'll have to disclose, like what the Middle East fund was doing last time." She added: "All this is just speculation, but the volume is really there."

A total of 113 million shares were traded, the busiest day since June 20, when Goldilocks Investment completed the purchase of its stake. The trading so far on Thursday signals the full day's volume may be about 126 million shares, according to data tracked by Bloomberg.

Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte, said the surge may have been triggered by technical trading. The gains followed once a recent high of 52 cents was breached, according to Mr Teo.

Noble Group's perpetual bonds traded up 0.4 cent at 15.3 cents, for the biggest rise in nearly two weeks, while the bonds due in 2020 were up 0.3 cent to 38.3 cents, the largest rise in a week, according to Bloomberg-compiled prices.  Lawyers for Noble Group have been in Singapore's High Court this week to challenge a lawsuit brought by a former chief executive office, Ricardo Leiman, who claims he's owed in unpaid shares and bonus.