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Abu Dhabi, UAEFriday 22 June 2018

Noble Group jumps in Singapore amid speculation of stake build

Stock in the Hong Kong-based commodity trader advanced as much as 38 per cent

Noble Group rallied strongly in Singapore. Edgar Su : Reuters
Noble Group rallied strongly in Singapore. Edgar Su : Reuters

Noble Group, the commodity trader that is struggling for survival after a multiyear stock rout and concerns it may default, surged in Singapore, with shares hitting their highest close since May amid speculation that large investors may be building stakes.

Stock in the Hong Kong-based company advanced as much as 38 per cent to 65 Singapore cents and closed at 64 cents. While the company has rebounded from an intraday low of 28.5 cents on June 6, it has still lost more than 60 per cent this year.

The jump prompted a query from Singapore Exchange. In response, the company said 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. 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,” said Margaret Yang, a strategist at CMC Markets. “But usually they’ll have to disclose, like what the Middle East fund was doing last time.

“All this is just speculation, but the volume is really there.”

A total of 124 million shares were traded, the busiest day since June 20, when Goldilocks Investment completed the purchase of its stake. The US$200 million fund is controlled by the investor Jassim Alseddiqi’s Abu DhabiFinancial Group, which has said it would target undervalued opportunities in the six GCC countries.

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 0.6 cents at 15.5 cents, for the biggest rise in nearly two weeks, while the bonds due 2020 were up 0.4 cent to 38.4 cents, the biggest gain in over a week, according to Bloomberg-compiled prices.

* Bloomberg