Here’s how battered Noble Group can win back investors’ trust

It should take a leaf from Glencore’s book.

Ever since Noble Group came under an acute short-seller attack earlier this year, the commodity trader has been doing everything in its power to support its flagging share price.

However, none of Noble Group’s efforts—which includes ramping up communications efforts, commissioning a third-party review, and even buying back its own shares—has proven effective so far.

A report by Barclays suggests that Noble should take a look at Glencore’s recently-unveiled fightback strategy in order to win back its investors’ trust.

Much like Noble, commodity trader Glencore has seen its share price drop steeply after being attacked by short sellers. On September 8, Glencore’s share price rebounded sharply after revealing that it will  do an equity issuance of US$2.5bn, suspend dividends for the next 12 months, reduce working capital and sell assets.

“We are not suggesting that a rights issue is the right thing for NOBL to do to turnaround sentiment on its stock. Every market is different, and a predominantly Asia-based investor base may react differently to rights issue announcements compared with a UK/European-based investor base. However, the reaction of the GLEN share price to the rights issue does suggest to us that investors want clear indications that debt on balance sheets will be brought down (by whatever means) before they rerate a stock higher,” Barclays said.