S&P cuts Noble Group outlook to ‘negative’, cites trading risk

(Reuters) by Anshuman Daga and Rujun Shen – Credit rating agency Standard & Poor’s has cut its outlook on Singapore-listed commodities trader Noble Group Ltd to ‘negative’ from ‘stable’, saying it expects higher earnings volatility. The move marks the latest problem for the embattled commodity trader, which has seen its shares dive as much as 48 percent since mid-February after previously unknown Iceberg Research claimed Noble had inflated asset values by billions of dollars in its accounting treatment of long-term supply contracts. Asia‘s biggest commodity trader has rejected the allegations and in March said it had started a legal action in Hong Kong against a former employee who it had fired in 2013 and was linked to Iceberg. “The higher risk nature of Noble’s trading positions could result in more volatile earnings and profitability for the company, in our view,” said S&P analyst Cindy Huang. However, the agency reaffirmed Noble’s credit rating of BBB-minus, the lowest investment grade. A downgrade would take the company’s rating into the junk category. Fitch and Moody’s also have an investment grade rating on Noble. Hong Kong-headquartered Noble is one of the largest Asian companies ever to be targeted by a slew of negative reports from … continue reading

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