Noble

Noble: Announced that it has agreed to invest in a newly established private mining venture – X2 Resources – where Noble, X2, TPG will each put in US$500m. Under the agreement, Noble will be X2 Resources’ preferred marketer and provider of supply chain management (SCM) and logistics services, which is in line with its strategy to focus on its core competence as a supply chain manager. OCBC notes that while the house do see benefits from the investment, note that most will need some time to flow through i.e. more medium to long term in nature. But for now, believe that headwinds could continue to come from the sluggish economy in China. Further expect its Agriculture segment to remain a drag on its overall profitability. Separately, the potential shutdown in Washington could also weigh on sentiment. As such maintain SELLrating and $0.76 fair value. House would be buyers below $0.80 (recent low was $0.785)