CIC pares Noble stake from 13.8% to 9.4%

The former is rebalancing its portfolio.

Noble Group announced that China Investment Corp (CIC), through its subsidiary Best Investment Limited, has pared its stake from 13.8% to 9.4% by selling 300m shares at S$1.32 each, says a report by OCBC Investment Research.

According to Noble, it said it will release the notification of the change in CIC’s interest as soon as it receives the same from CIC. The share sale sent Noble’s share price tumbling some 9.3% to S$1.27, before recovering slightly to close at S$1.30. Noble says the move is due to CIC’s overall portfolio rebalancing and CIC continues to support Noble’s business strategy.

Here’s more from OCBC Investment Research:

Nevertheless, we maintain our HOLD rating and S$1.31 fair value (based on 13.5x FY14/FY15F EPS) as we believe that Noble’s core business is stabilizing, although near-term catalyst may still be lacking as China’s economic growth remains splotchy.

The share sale sent Noble’s share price tumbling some 9.3% to S$1.27, before recovering slightly to close at S$1.30. Noble says it understands that the placement is part of CIC’s overall portfolio rebalancing exercise, and CIC will continue to support Noble’s business strategy. However, CIC is likely to have made a slight loss on the move – this as it paid S$2.11 for its stake back then in 2009 (or S$1.37, adjusted for the 6-for-11 bonus issue).