Noble

Noble: UBS notes CIC initially acquired its stake in Noble on 21 Sep 2009, with a total consideration of US$850m and a price of $2.1137. Adjusting for a 6-for-11 bonus issue in respect of FY09, the adjusted price is $1.368, putting CIC at a slight loss on its investment made 5 years ago. CIC had initially acquired its stake in Noble given Noble's agricultural assets and supply chain management activities in the space. The acquisition was taken with a view to jointly invest in agricultural commodities, by tapping on both companies' respective strengths. This is similar to the rationale for COFCO's acquisition of Noble Agri, which seeks to tap Noble's origination base and COFCO's access to China; which leaves UBS to question the motivation and timing for CIC's stake sale at a loss. The house believes a quick turnaround in Agri is unlikely, with headwinds at Noble likely to persist in its various divisions. Maintains Sell with TP $1.30