Noble Group – The Bottom of the Iceberg
Singapore's port authority has denied allegations of misconduct made by Iceberg Research against a subsidiary of commodities trader Noble Group, according to Reuters. The newswire reported that Singapore's Maritime and Port Authority (MPA) said it had in 2013 received information relating to the conduct of Noble Resources International Pte Ltd, but did not find any malpractices by the company.
The law of diminishing returns have clearly set in on Iceberg Research’s third research report against Noble Group.
Recall that the first Iceberg report was released on 15 Feb and the reaction was a 13% drop in Noble Group’s shares in the subsequent two days. The second report was on 25 Feb and the reaction was a lesser 11% drop in the subsequent two days. The reaction to the third and final report was a 4.5% gain on 23 March.
This indicates that the sell-down in relation to Iceberg’s claims has likely run its course. Technically, we see near-term support at $0.91 with upside to $0.965 and $1.02, the latter coincides with a major 23.6% upward retracement of the stock’s correction from a high of $1.48 back in Jan 2014.
If the upward retracement extends further, look for further subsequent upside to the 38.2% upward retracement level of $1.08. Our fundamental TP for Noble Group is $1.12. Excerpts from DBS Vickers' report this morning