Noble Group Leads the Market Lower This Week – Again

Editor’s Note: Important information about Noble that was initially omitted has been added to the article. The added portion’s given in italics. The Fool regrets the error.

Our local share market, represented by the Straits Times Index  (SGX: ^STI), has slipped slightly by 0.4% since last Friday to end the week at 3,513 points.

Of the 30 shares which make up the index, exactly half ended the week with losses. The company that bled the most red ink for the week was commodity outfit Noble Group Limited (SGX: N21); its shares slumped by 5.1% to S$0.84.

Noble was under the spotlight during the week following its Annual General Meeting (AGM) that was held on 17 April 2015. During the AGM, some shareholders felt that the company’s management was “dodging” certain questions that were asked. Veteran investor, Mano Sabnani, was quoted as saying:

“I came here today with a positive view on Noble but I am leaving with a negative one because of the way [management] conducted the meeting. They are very defensive.”

The tense AGM prompted David Gerald, the Founder, President & Chief Executive Officer of The Securities Investors Association (Singapore), or SIAS, to ask Noble to be accountable and post a transcript of the AGM. The company obliged and released the transcript to the public here. Upon review of the transcript and audio recording of the meeting, Gerald thought that Noble had, in general, conducted the meeting well. 

Noble also issued a clarification to set certain things straight. The statement can be accessed here. In the statement, Noble refuted the media’s comments that it had “repeatedly dodged shareholders’ queries on the group’s accounting practices.” The company wrote:

“All shareholders’ queries were answered, either by Mr. Richard Elman, Mr. Yusuf Alireza, or Ms. Irene Lee. In addition, several directors stayed behind after the AGM and spoke to interested shareholders personally.”

In the clarification, Noble also added that it will be more transparent with its disclosures, starting with the release of its fiscal first-quarter results (for the three months ended 31 March 2015) which is scheduled to be on 7 May 2015.

Noble also included a discussion of Yancoal’s valuation in the same clarification. Yancoal, an Australian mining outfit in which Noble has a stake in, had been a major point of contention in Iceberg Research’s reports criticizing Noble’s business; Iceberg, a little-known research outfit, had released the first of its three reports on Noble in 15 February 2015.

Meanwhile, on the other end of the losers-gainers spectrum, we have United Overseas Bank Ltd (SGX: U11) emerging as the biggest winner within the Straits Times Index for the week. The bank’s shares had gained 2.5% to S$24.70.

The bank revealed this week that its offer to fully acquire Far East Bank Limited (FEB) at S$3.51 per share had turned unconditional, meaning to say that a compulsory acquisition can now take place. UOB currently owns more than 90% of FEB.

FEB, which is a banking subsidiary of UOB, offers “commercial banking and financial services.” Prior to the offer, UOB had owned around 79% of FEB. UOB said in its initial announcement in March this year that a full absorption of FEB would lead to greater management flexibility and offer an opportunity for minority shareholders to realise their investment.

The next biggest weekly winner in the Straits Times Index, which chocked up gains of 2.4% to S$8.46, is stock market regulator and operator, Singapore Exchange Limited (SGX: S68). The firm released its fiscal third-quarter results this week and saw revenue jump 20.4% year-on-year to nearly S$200 million on the back of broad-based growth across all business divisions. Likewise, Singapore Exchange’s bottom line put on 16% to S$88 million.

Ascendas Real Estate Investment Trust (SGX: A17U) and CapitaMall Trust (SGX: C38U) were the other index components that released their quarterly results during the week. Ascendas REIT’s units stepped up by 1.5% to S$2.67 while CapitaMall Trust’s units inched up 0.9% to S$2.27. You can check out Ascendas REIT’s results here and CapitaMall Trust’s here.

The SPDR STI ETF (SGX: ES3), a proxy for the Straits Times Index, is selling for around 14.1 times its historical earnings at the moment and has a dividend yield of 2.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.