FOCUS - Noble's share price rebounds after CEO's resignation triggered plunge

print Print this document.  Post this story to Facebook.
Vivian Teovivian.teo@fastmarkets.comJoint News Editor - Asia

Singapore 31/05/2016 - The share price of Noble Group rebounded on Tuesday after plunging eight percent on Monday following the surprise resignation of CEO Yusuf Alireza.

Noble’s share price is up 5.4 percent to S$0.295 ($0.21) per share on the Singapore Exchange so far on Tuesday.

Noble’s share price had fallen 8.2 percent to close at the day’s low of S$0.28 on Monday, with more than 131.6 million shares changing hands.

“The CEO’s resignation does come as a surprise, and may have a knee-jerk negative impact on investor sentiment in the near-term,” said Singapore’s OCBC Investment Research.

Noble announced on Monday that its directors have accepted the resignation of Alireza and has appointed William Randall and Jeff Frase as co-CEOs.

Singapore’s DBS Bank noted that while Alireza’s resignation was a surprise, “we do not expect any major changes in strategy given both William Randall and Jeff Frase have been with Noble for several years and Richard Elman remains as chairman and executive director.”

Noble also announced on Monday the sale of its US retail energy unit, North Americas Energy Solutions (NAES) as part of its fund raising initiative.

At this stage, the exact impact of Noble’s financials from the sale of NAES is still unclear, given Noble has never disclosed the earnings contribution for the unit and its selling price is yet uncertain, DBS said.

“While the sale of NAES will strengthen Noble’s balance sheet, we believe investors will remain cautious on the stock until Noble is able to achieve positive operating/free cashflows on a sustained basis,” it added.

DBS has a hold recommendation on Noble shares and a target price of S$0.32, pending further details on the NAES sale.

OCBC also maintained its hold rating on Noble shares with a S$0.34 target price.
8 Bouverie Street, London, EC4Y 8AX, UK
+44 (0)845 241 9949