Gal wrote: Noble has released 2 reports. Tomorrow all kateks will suffer a lot of pain.....those who hesitated to buy last week will suffer big-time regret.
No matter how hard they are trying to window dressing their balance sheet, it is still a shitty company with negative FCF every quarter. The only reason for price going up is company share buyback, which will worsen their cash flow even more and will terminate someday anyway. CIC have already regretted bought it above 2 dollars and cut some of their loses last year. Good luck.
The release of the unaudited buoyant financial statistics aimed at showing good financial performance for the quarter will only cause a slight knee jerk reaction in the market. Most of those with heavy holdings in this stock and were reluctant to pare down their holdings over the past few days will definitely take this opportunity of temporary investor interest to reduce their stockholding level. Mind you, the commodities market is currently experiencing very weak sentiments at the moment, and most market players have seen significant drop in both their trading volume and margin. Only Noble, it seems, is bucking the trend.
Iceberg Research has on 12 Aug presented a written riposte to the PwC Report on its review on Noble's MTM valuation model(s). Investors who are still harbouring contrary ambitious sentiments of a strong recovery of Noble shares should spend some time reading Iceberg's reply. They contain interesting issues, notably, that the allegations of Noble's exotic high valuation of its futures contracts in commodities have not been in any way answered.
As is usual, the reviewer, as expected, took the middle path. PwC affirmed that Noble did conformed to accounting standards (in relation to MTM valuation processes). However, it distanced itself from the actual valuation process by putting on record that the scope of its review was limited and that it had worked on spreadsheets produced by Noble's Finance (valuation and product control) team, and that it did not work directly with the contracts. There was the qualification that "management is responsible for the measurement of individual valuations and the overall valuations of contracts". In other words, the allegations by Iceberg, Muddy Waters and Michael Dee have not been disproved because PwC was not involved in the actual valuation process. So this review, which was designed to indirectly dispel the allegations of exotic and over-valuation of the profit elements in Nobles contracts, was nothing but a red herring, to put it bluntly.
For more details regarding the actual financial status and perspectives of Noble, readers should refer to Iceberg's reply of 12 Aug, which is very detailed in its analysis.
Both Standard and Poor and Moody's have already downgraded the outlook on Noble to negative.
Last edit: 9 years 2 months ago by Aquarius. Reason: addition
Caveat Emptor - According to some sources Phillip Securities have recently imposed trading restrictions for on-line transactions involving Noble shares. Clients cannot buy on-line (only can buy through dealers) but no restriction to on-line selling of this counter. POEMS is passing the risk from retail investors to its dealers. Such action only serves to be a pre-emptive measure in case the price of Noble collapses. Not sure whether other securities firms are also taking this measure at the moment.
Last edit: 9 years 2 months ago by Aquarius. Reason: re-phrasing
The latest news on Noble is that, as of yesterday 19 Aug, besides Phillip Securities, two other brokerage houses have placed restrictions on trading on this counter. Both UOB-Kay Hian and CIMB have placed restrictions on their online trading platforms involving Noble. UOB-Kay Hian has placed a condition of 50 % up front payment for purchases involving the value exceeding $50,000 while CIMB threshold value is for purchases above $200,000. Only Phillip Securities have barred online purchases of this stock.
Looking at the UOB-Kay Hian and CIMB conditions, I would say that it only serves as an alert call to the potential danger of trading in this stock and not actually offering the brokerages any real cushion against the potential risk (of a collapse in Noble's price). The reason is, this restriction can be easily circumvented. All they (online buyers) need to do is to buy to the value of $49,999 or $199,999 and they would not need to abide by the cash requirements of UOB-Kay Hian or CIMB respectively.
It does appear that these brokerages are all too weary of the volatility of this stock at the moment because it is the most shorted counter in SGX lately, and utilization rate of borrowing of stocks on this counter by short sellers has been rising rapidly. Loh Hoon Sun, CEO of Phillip Securities even rated Noble as a speculative stock
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