The Noble House, already under pressure in a weak commodities market when blogger Iceberg Research alleged in Feb last yr that the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts. The company has rejected the claims. And gor PWC to bless its methodology forgetting that int’l accounting firms have reputations juz better (slightly) than tabloid journalists and second-hand car salesmen.
But until now, the bad news never stopped despite the effirts of the CEO and the share-buying chairman and founder. Fitch Ratings affirmed Noble Group’s BBB-minus rating with a stable outlook yesterday (Jan 14), remaining the only agency to assign this nvestment-grade rating on Asia’s biggest commodities trader.
Fitch said the decision followed Noble’s improved balance sheet and sufficient liquidity position following its stake sale in Noble Agri, its pledge to cut working capital needs for its metals unit, and continued cash flow generation from its operations,
Both S&P and Moody’s had cut Noble’s rating to junk, sending its bonds and stocks tumbling. Its stock is trading at the lowest since October 2008.
Its credit default swaps contracts trade on an upfront basis (Pay before you bet, credit not allowed) and its CDS curve is inverted, an indication investors consider it a stressed credit. All this makes its bankers keep their fingers on the recall button. For Noble, no credit, no play.
But new yr, new luck? And the yr of the Monkey is coming on 8 Feb. Should be a gd yr for traders.
Maybe by the end of the yr of the monkey the chairman who has been buying shares will have the last laugh. As will the CEO. But then in the Chinese paneheon of deities, the Monkey King is the trickster. So who knows? Ask Buddha, the only deity who can defeat him.
Nmm. I’ll go to the Chinese temple on Tembling Road on Feb 8 and toss the fortune stocks on whether to buy Noble.
Opdate at 6.45am: Maybe it should try to refinance its borrowings early. Glencore juz did this to show its banks are onboard.
A stock to watch.