Noble Group

[egghead]

How is this the same as dual listing? Is KepLand a dual listing for KepCorp? Is SembMarine a dual listing of SembCorp?

The listing of Noble's agri business has been talked about for some time. This announcement just confirms the intention.

However, given the current market turmoil, it is unlikely that it will be done soon.

As a trader, lower commodity prices actually lowers the working capital requirement for Noble. The thing to watch is volume.

[cif5000]

most of the international banks now facing new constraints in lending

Wondering. Is that your personal view or did you establish that as a fact from somewhere?

[Gregg]

Noble posts first quarterly loss in over a decade

http://www.reuters.com/article/2011/11/0...TC20111109

[Musicwhiz]

The Straits Times
Nov 10, 2011
Noble suffers first quarterly loss in a decade

SUPPLY chain manager Noble Group yesterday posted its first quarterly loss in more than a decade, hurt by turbulence in commodity prices as the global economy weakened.

But the company said it had made good progress in the planned listing of its agriculture business in Singapore and potential investors were reacting positively.

'For the first time since we started writing these statements well over a decade ago, we are reporting a net loss for a quarter,' said Noble chairman Richard Elman in a statement. 'It goes without saying that we are very unhappy with this performance even if it does just cover a very short period.'

The volatility was not just restricted to Noble's industry and markets, but was a result of the unstable macro environment which was 'a continuation of the financial crisis that has been rumbling on since 2008,' Mr Elman added.

Noble reported a net loss of US$17.5 million (S$22.3 million) for the three months ended Sept 30, compared with a net profit of US$157 million a year earlier, hurt by unrealised mark-to-market losses.

Noble, which counts sovereign wealth fund China Investment Corp among its shareholders, has three business segments - agriculture, energy, as well as metals, minerals and ores.

It said its processing margins in agriculture remained under pressure, while below-average crop yields in the sugar business in Brazil and continuing counter-party defaults in the cotton industry had undermined the operating environment.

It added that its energy segment was hurt by the very sharp decline in the price of certificates of emission reductions (CERs) or carbon credits during the quarter.

'Since the financial crisis of 2008, we have regarded the emissions trading system as being a luxury that the Europeans cannot afford, and as such have taken a cautious approach to the business,' Mr Elman said. 'But the recent dramatic decline in the price of short-dated CERs - a maturity that we cannot hedge against - has meant that further writedowns are being made.'

Noble said last month that it was seeking to list its agriculture business on the Singapore Exchange, but warned that the process would be subject to market conditions.

'Progress is good and we believe the market will be receptive to this initiative. The market reaction from potential investors has been very encouraging,' Mr Elman said, adding that the firm would release more details later. The company yesterday announced the stepping down of chief executive Ricardo Leiman with immediate effect. Mr Leiman, 45, has agreed to remain as an adviser.

REUTERS

[greypiggi]

anyone picking up on this? I just entered 20 lots at 1.22. I think should be a good long term play?

[Gregg]

My entry price was $1.525 few months ago...bad...

[greypiggi]

just so that readers don't just follow. My 20 lots is part of my pyramid down strategy. And i view noble as both a technical short term trade and long term holding. Here is how i intend to play it.

20 lots @ 1.22. If it goes down further to 1, i will buy another 20 lots. To avg out at 1.11. If it goes down further from there to 0.8, i will buy another 40 lots, 0.6 another 40 lots, 0.4 (2008 low), another 80 lots.. I am confident because this is a Noble and not some small non blue ship. I am ultimately prepared to own up to 200K of Noble. Meaning I can double down all the way to 2008/09 low.

If noble spikes back up to 1.5-1.6, i will just sell my 20 lots and take a small profit. So it is technical play on this count. I can then look out for my commodity part of portfolio later.

[Musicwhiz]

No worries - no intention to follow anyone LOL! It's interesting to see how things pan out from here. Too much expectations had been factored into the share price and perceived "growth".

Anyhow, Noble was never on my radar due to its super low margins and high debt and lack of FCF.

[weijian]

Noble doesn't really attracts, as a company due to the reasons by musicwhiz..But it is similar to some stocks like NOL etc, where it is highly cyclical and would be a stock to watch out for, if someone wants to play this theme of buy or sell at the bust or boom respectively (since it is quite robust in a commodity bust scenario)

So, one would want to question whether the commodity cycle is currently in a 'bust' state, before deciding to take a position, whether long or short on it?

[Musicwhiz]

So much for loyalty and sticking to a company through thick and thin. At the first hint of trouble, "investors" bail out in droves and send the share price crashing! Then again, the report does mention "traders", and not "investors", so it does do itself some justice.

The Straits Times
Nov 11, 2011
Noble shares dive on shock Q3 loss
Crash triggered by company's report of first quarterly loss in 14 years

By Goh Eng Yeow

TRADERS stampeded out of giant commodities trading firm Noble Group yesterday, sending its share price plunging by as much as 27.7 per cent to levels last seen during the global financial crisis two years ago.

The crash, which wiped about $2.73 billion off the company's market value, was triggered when Noble announced its first quarterly loss, of US$17.5 million (S$22.3 million), in 14 years after trading hours on Wednesday.

Founder and chairman Richard Elman alone suffered a loss of about $500 million in the 21.6 per cent stake in which he has a deemed interest.

A massive 436.7 million shares worth $529.5 million changed hands in frantic trading, as the counter ended 42.5 cents, or 26.5 per cent, lower at $1.18. This accounted for about 29.7 per cent of yesterday's total market turnover in value terms.

Other commodities-linked firms were also hurt by Noble's rout, with plantations giant Wilmar International losing 3.55 per cent and agricultural commodities trader Olam International dropping 6.87 per cent in value.

Traders said that the sell-off in Noble was exacerbated by the jitters in the global stock markets, as investors agonised over the debt problems faced by Italy, the world's seventh largest economy.

Investors were also dismayed by a statement from the company late last night which announced the abrupt departure of the group's chief executive Ricardo Leiman who was previously seen as a possible successor to Mr Elman.

'Leiman's departure is adding uncertainties when the company is facing a tough time, even though Mr Elman's return to the helm will probably provide a safe pair of hands to see it through,' said OCBC Investment Research analyst Carey Wong who cut his call to 'sell'.

Noble had shocked investors by reversing into a third-quarter loss compared with a net profit of US$157 million a year earlier.

In his usual folksy-style write-up to shareholders, Mr Elman pinned the blame for the company's unexpected loss on extreme market volatility which had characterised trading during the quarter.

'We would obviously have much preferred to report records all over the place, but we operate with the realities that you read about in the financial press every day,' he wrote.

And volatility had reached such a level that there was little which the company could do, except to ensure that its risk exposures are 'as considered as possible, which obviously also means that profits are impaired in the short run'.

Mr Elman also disclosed that in the volatile cotton trading business, the company was seeing 'renewed defaults', and this was partly responsible for the lacklustre performance of the company's huge agricultural division.

'Extreme price volatility has resulted in participants walking away from contracts in an unprecedented way - so much for the sanctity of contracts,' he added.

But Royal Bank of Scotland Asia Securities' analyst John Rachmat said he was not entirely convinced by the explanation.

'If contractual defaults were the root cause of this loss, and particularly if those defaults occurred in such a litigious country as the United States, we believe that Noble can strongly pursue legal action with good chances of winning damages,' he added.

engyeow@sph.com.sg