Noble Group, the commodity trader that is struggling for survival after a multi-year stock rout 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, SGX-listed company advanced as much as 38 per cent to 65 Singapore cents and ended the trading day at 64 cents.
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 was not 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.
We can't rule out the possibility that some big players are probably accumulating the shares... But usually they'll have to disclose, like what the Middle East fund was doing last time.
CMC MARKETS STRATEGIST MARGARET YANG
Goldilocks Investment, an Abu Dhabi fund, is among the company's new holders after building up a 5 per cent stake over two days in June.
"We can't rule out the possibility that some big players are probably accumulating the shares," strategist at CMC Markets Margaret Yang 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 120 million shares were traded, the busiest day since June 20, when Goldilocks Investment completed the purchase of its stake.
Mr Nicholas Teo, a trading strategist at KGI Securities (Singapore), said the stock 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 officer, Mr Ricardo Leiman, who claims he is owed in unpaid shares and bonus.