Embattled Noble Group still stuck in the grip of wily short-sellers

Short-sellers account for over 20% of daily trade.

Noble Group is still languishing in the grip of shrewd short-sellers, according to a report by Jefferies Singapore.

Analyst Abhijit Attavar noted that short-seller activity in Noble shares have substantially increased since mid-April, which has adversely impacted its share price.

“We have noticed a substantial increase in short-seller activity in Noble shares, particularly since mid-April, with short-selling averaging around 20-30% of daily traded volumes and outstanding borrow rising to 8% of free float,” he wrote.

The report said that short-sell activity is clearly one of the principal reasons for the sharp share price decline from around S$0.90 levels to the current $0.65.

He noted that outstanding borrow has spiked from around 50m shares in mid-April to as much as 400m shares currently.

“Total borrow available on Noble shares is over 1bn. Borrow utilisation is 40% and therefore it is still relatively liquid, unlike OLAM at the peak of the MW short-selling. However, total borrow has spiked to almost 6% of total outstanding equity and about 8% of the total float in just two months,” said the report.