Noble Group Jumps in Singapore Amid Speculation of Stake Build

Updated on
  • Stock jumps as much as 38%, triggering stock exchange query
  • Some ‘big players’ may be accumulating shares, CMC’s Yang says

Noble Group Ltd., the commodity trader that’s 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 percent 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’s still lost more than 60 percent this year.

The jump prompted a query from Singapore Exchange Ltd. In response, the company said 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 Co., 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.”

Shares Traded

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

Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte, 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 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.

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.

    Before it's here, it's on the Bloomberg Terminal.