stocks

Noble shares surge as much as 38 percent on volume jump

Key Points
  • Troubled commodity trader Noble saw its shares surge in Thursday afternoon trade
  • It wasn't clear what drove the sudden rush into the beaten down stock
  • The company told SGX it wasn't aware of a reason for the move
Noble Group
Nicky Loh | Bloomberg | Getty Images

Troubled commodity trader Noble saw its shares surge in Thursday afternoon trade, but it wasn't clear what drove the sudden rush into the beaten down stock.

The stock rose as much as 38.30 percent to a high of 65 Singapore cents ($0.47) in late afternoon trade, before retracing slightly to end up 36.17 percent, or 17 Singapore cents, at S$0.64.

A trader told CNBC that he didn't see any large block trades on his screen. But in the afternoon, there were several trade sizes of 100,000 to nearly 400,000 shares, according to Reuters data.

Nearly 124 million shares changed hands on Thursday, compared with five-day average volume of 18.27 million, according to Reuters data.

Short-covering was unlikely to explain the move as Singapore Exchange (SGX) data indicated that only 678,000 shares valued at around S$335,818.50 were sold short as of the close on Wednesday.

But by the close of Thursday, that had jumped to around 4.1 million shares sold short, valued at around S$2.30 million, likely driven by expectations the stock's surge would fade.

The company has been searching for a strategic investor, to-date in vain.

In a response to the SGX's query on the unusual activity, Noble said it was unaware of any information not previously announced that could explain the trading.

Noble didn't provide additional information.

"The group ensures that it is at all times in compliance with the listing rules and disclosure obligations. The group does not comment on third parties' actions," a representative of Noble said in an email in response to CNBC's request for comment.

Earlier this week, two substantial shareholders reported to SGX that they cut their interest in Noble.

Morgan Stanley said in a Tuesday filing that its interest fell from 6.55 percent of the company, or around 86.045 million shares, to 5.9273 percent, or around 77.81 million shares.

Similarly, Mitsubishi UFJ Financial said in a Tuesday filing that its stake fell to 5.93 percent form 6.55 percent.

At its peak in 2010, Noble was Asia's largest commodity trader with a market cap of more than $10 billion.

Shares hit an all-time high of 17 Singapore dollars in 2011, but have since tumbled as Noble struggles with the aggressive commodity price decline in recent years.

Noble has been forced to shuffle management, sell down assets and slash costs to boost liquidity. At the same time, its management has been navigating a series of credit downgrades, write-downs and accusations of improper accounting standards, denied vociferously by the company — all of which contributed to the dramatic collapse in its share price.

Correction: This article has been updated to clarify the value and volume of shares sold short on Wednesday.

—Dan Murphy contributed to this article.

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