Noble

Noble: Citi maintains Buy Call with $1.68 TP. House note that Noble’s valuation band is now near to Global Financial Crisis‘s (GFC) low, due to the difficult market conditions and challenges across the trading sector. Sentiment has also been impacted by the rise in Noble’s CDS since April (its CDS has been falling since early 2012 till end March. Despite these challenges, highlight that Noble’s group gross margin per ton has been improving last two qtrs and has continued to recover to US$8.7/t in 1Q12, continuing on the trend from 4Q11 where it had registered a small recovery to US$5.5/t (vs US$4.1/t in 3Q11, US$9.2/t in 2Q11, US$9.1/t 1Q11). Add that the low margin in 3Q-4Q11 was well within the range of US$5.8-4.5 which it had posted during the GFC period in 4Q08-1Q09. Separately, Co. is being sued by cardo Leiman, its former chairman, claiming his shares and 2011 bonus were wrongfully withheld. Leiman said that as CEO he’s entitled to an annual discretionary bonus of 3% of Noble’s net income, according to the lawsuit filed with the Singapore High Court.