Noble Group 01 (May 08 - May 10)

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RESEARCH ALERT-Credit Suisse cuts Singapore's Noble to neutral

SINGAPORE, Jan 13 (Reuters) - Credit Suisse has downgraded Singapore-listed commodities firm Noble Group to "neutral" from "outperform" and cut the price target to S$1.20 from S$2.10, citing the recent sharp fall in commodity prices.

"We reduce our FY09-10 forecasts for Noble by 35-44 percent on the back of falling commodity end-demand and lower profit contribution margin assumptions for its three core commodity segments," Credit Suisse analyst Su Tye Chua wrote in a report.

The sharp drop in commodity prices since mid-2008 has also increased the prospects of counterparty default risk, the bank added.

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Update.

Now, near 50day support.

Tekan sen may cross kijun sen if support does not holds

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Not vested. From OCBC:-

Noble Group Ltd: Improving indicators
Improving macro indicators. Demand for commodities is likely to remain subdued in 1H09. However, there have been signs that suggest that the bottom could be in sight. The Baltic Dry Index (BDI) recently staged a
strong recovery, jumping over 50% from its Dec 08 low to cross the 1000 mark. De-stocking and production cut-backs have led to lower inventory levels, while steel mills in China are gradually resuming operations. In addition, the effects from China's RMB4tr economic stimulus package are expected to kick in from 2H09, bolstering demand for metals and energy.

Strong credit metrics boosts endurance. We are of the view that it is premature to draw conclusions to a sustained recovery for commodities, given the uncertainty surrounding the global economic environment.
Nevertheless, we believe that Noble Group Ltd (Noble) will be able to manoeuvre the uncertain operating landscape, and ride on its recovery, given its scale, robust risk management system and product diversity.

Falling commodity prices will ease working capital requirements and reduce its need for debt. Its strong balance sheet with low gearing of 4% (after adjusting for readily marketable inventories) will enable it to weather the ongoing credit crunch, and its ample cash position eliminates near term refinancing risk.

Dwindling global trade could dampen volumes. While Noble remains in good shape to tide through the current turbulence, it is not immune to dwindling global trade and demand. The credit crunch has crimped global trade and remains a major obstacle hampering the industry. Faltering production has led to a slump in demand for metals and energy. We have moderated our FY09 estimates to account for weaker contribution from its Energy and Metals, Minerals and Ores (MMO) segments, bringing our FY09 earnings estimate 14% lower to US$458.6m.

BUY, with a lower fair value of S$1.58. Noble's FY08 results are slated for release on 26 Feb. We are forecasting a 136% surge in earnings to US$609.9m, including gains from its Portman sale. Key aspects to watch out for include its earnings growth against a climate of falling commodity prices, cash levels and net gearing. Performance of the group's MMO segment is likely to draw scrutiny in light of tumbling demand for metals. We anticipate further liquidation of its MMO inventories in response to weak global demand. We maintain our BUY rating on the stock, but trim our fair value estimate to S$1.58 (from S$1.83) on the back of lower FY09 earnings expectations.(Lee Wen Ching)

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RPT-Noble Group wins Australia wheat export licence

SYDNEY, Feb 11 (Reuters) - Global commodities trader Noble Group has been awarded a licence to export Australian wheat, industry regulator Wheat Exports Australia said on Wednesday.

Hong Kong headquartered Noble's Australian unit was the 22nd group to be accredited to export wheat after the market was deregulated from July 1 last year, Wheat Exports Australia said.

Previously, AWB Ltd , the former Australian Wheat Board, held the sole right to sell Australian wheat overseas, but was stripped of its monopoly after being found to have paid kickbacks to the Iraq government of Saddam Hussein.

Noble joins other major commodities traders such as Cargill Inc, Louis Dreyfus and Glencore International in gaining a licence.

Australia has a bigger pool of wheat to export from the 2008/09 harvest, as the crop recovered from the severe drought that hit growers in recent years.

The latest harvest yielded an estimated 21 million tonnes, up from the previous year's harvest of 13.0 million tonnes.

Shipping schedules show Western Australian farmer-owned grain handling cooperative CBH Group has replaced AWB Ltd as Australia's largest wheat exporter.

Western Australia, Australia's top wheat exporting state, harvested an estimated 8.9 million tonnes of wheat in 2008/09, the bulk of which will be handled by CBH.

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Singapore Hot Stocks-Noble tumbles on weaker metal prices

SINGAPORE, Feb 17 (Reuters) - Commodity trader Noble Group tumbled as much as 9.2 percent on Tuesday after industrial metals prices fell amid a deteriorating global economy, traders said.

Copper prices edged up in Shanghai on Tuesday but analysts remain bearish, after the metal fell to its lowest in more than a week on Monday as Japan suffered its biggest economic contraction in decades and inventories jumped. [ID:nLG30882] Other metals such as aluminium, zinc and lead also fell in London on Monday [METALS-RTRS].

Noble Group traded 9.17 percent down at S$1.09 by 0732 GMT.

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[url]thisisnoble.blogspot.com[/url]

Global commodity demand to dip further: Expert
SIDNEY: Global commodity prices have been witnessing a decline since mid of 2008, mainly because of waning demand due to the global economic crisis and it would go to some extend more, said Westpac Banking Corp senior economist Andrew Hanlan in a statement.

“If, as we expect, international demand remains weaker for longer, then expectations of a recovery in markets will be met with disappointment in the early stages,” he added.

Weak international demand for key Australian export commodities suggests a price decline for many could have quite a distance to run, according to a regional report issued Friday by Westpac Banking Corp.

Commodity prices generally started to plunge in the second half of 2008 in response to softening demand and as a massive deleveraging of commodity markets unfolded, it said.

Encouragingly, prices of a number of rural commodities have stabilized, or even rebounded a little from an oversold position in November, but the weak demand environment suggests this will prove to be a temporary rebound, according to the bank.

A positive in this cycle for Australian commodity exporters is that prices, coming from record highs, in many cases are still above historic averages, with a sharp fall in the value of the Australian dollar helping cushion the fall, he said

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Singapore Hot Stocks-Noble up on earnings hope

SINGAPORE, Feb 26 (Reuters) - Commodities group Noble rose as much as 4.9 percent to outperform a flat Singapore benchmark index, buoyed by hopes of strong fourth-quarter earnings after Thursday's market close.

A dealer from a local brokerage house said investors were expecting Noble to post strong profits after fellow commodities firms Straits Asia Resources and Olam reported their net profit more than doubled.

However, he said the gains may not last given the volatility in the stock market. "Markets are still shaky, investors are in for the pre-earnings play," he said.

Noble is expected to say later Thursday that full-year net profit more than doubled in 2008, according to the average of 8 analysts polled by Thomson Reuters.

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Noble more than doubles FY08 net profit By OH BOON PING

Noble Group reported on Thursday a more than doubling in net profit to US$577.2 million on a 54 per cent surge in sales to US$36 billion for the year ended Dec 31, 2008.

Earnings per share were 17.87 US cents - up from 8.52 US cents the previous year.

Revenue growth continues to be well diversified with each of the group's business segments reporting revenue increases of between 25 per cent and 70 per cent compared to fiscal 2007.

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From OCBC:-

Noble Group Ltd: Resilient performance

Proved its resilience in 4Q08. Noble Group Ltd (Noble) delivered a 19% YoY rise in 4Q08 revenue to US$6.8b accompanied by a 24% growth in net profit to US$138.9m. For FY08, the group reported a 54% gain in revenue to US$36.1b and a 124% surge in net profit to US$577.3m, which was a shade lower than our expectations but above the street's US$544.7m estimate.

Excluding one-off items, we estimate that net profit would have risen 83.4% to US$473.4m. A 4.4 US cent dividend has been declared,
translating to a yield of 5.8%.

Gross profits robust. All its key segments except for Metals, Minerals & Ores (MMO) posted higher gross profits in FY08. Agriculture was the strongest segment with a 117.5% growth. In contrast, MMO weakened by 28.5% due to sluggish demand for metals following the global economic crisis. Much of the year's growth was concentrated in 1H08. Growth momentum tapered off in 2H08 as the economic crisis struck, painting a less rosy outlook for 2009.

Balance sheet remains healthy. Noble's financial standing remains strong. The group has emerged to a net cash position (after adjusting for readily marketable inventories). Its financial strength is good (net cash) vs. its peer Olam with an adjusted gearing ratio of 0.74x. Noble's cash position improved to US$1.3b in Dec 08 (vs. US$0.7b a year ago), more than sufficient to cover its short term debt of US$0.5b. We expect low commodity prices to ease working capital requirements in FY09. Debt profile is also healthy with 80% of debt possessing maturities in excess of 18 months.

In good shape to ride out the storm. Noble has proven its resilience by performing well against a volatile backdrop in 2008, but it is not immune to the global economic downturn. Tonnage eased in 2H08 as the credit crunch led to a drought of Letters of Credit (LC) and counterparty risk grew more pronounced. This situation is likely to persist in 2009, and in the absence of counterparty credit insurance, we expect business activity to remain suppressed.

We have trimmed our FY09 earnings estimate by 18% and expect core earnings to contract by 20%. Noble has announced an offer to acquire Australia listed Gloucester Coal for US$201.5m. It has the financial muscle to carry out an all-cash purchase given its robust US$1.3b cash position. We maintain our BUY rating, but ease our fair value estimate to S$1.33 (from S$1.58) on lower earnings forecast

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RESEARCH ALERT-CLSA starts Noble with sell

SINGAPORE, March 9 (Reuters) - CLSA has started coverage on commodity trader Noble Group with a "sell" rating and a price target of S$0.70, which represents a downside of 33 percent from its Friday's closing price of S$1.05.

"Noble enjoys a formidable position in global commodity supply-chain management. However, most of its divisions are under pressure as volumes and margins succumb to global headwinds," CLSA analyst Thilan Wickramasinghe, said in a research report.