A share price crash isn’t Noble’s biggest enemy: analyst

It needs to worry more about bankers and creditors.

Noble has a more insidious enemy apart from a visible share price decline. As the commodity trader came under fresh attack yesterday, an analyst warns that Noble will have to reckon with a potential dent in stakeholder confidence.

Nicholas Teo of CMC Markets notes that the biggest risk for Noble is the perception that key counterparties such as bankers and trade creditors may have.

“This group could include bankers and trade creditors, with any unfavorable change in credit lines or terms of trade being a larger risk than the negative moves in share price. While Muddy Waters concurred with most of Iceberg’s previous allegations, their own report only managed to offer new angles that were at best marginal compared to those of Iceberg’s,” stated Teo.

This group could include bankers and trade creditors, with any unfavorable change in credit lines or terms of trade being a larger risk than the negative moves in share price.

But Noble seems safe, at least for now. Teo noted that stakeholders did not seem highly alarmed by the fourth assault versus Noble in so many weeks.

“If we use Noble’s Credit Default Swap as gauge for the risk perceived by this group of stakeholders, they certainly did not show any heightened state of alarm overnight. Noble’s 20/06/20 CDS closed almost unchanged at a level of around 343. This compares to a recent high of 480 reached during the time of Iceberg’s third report,” he noted.