Noble

Noble: S&P reiterated its BBB-/Stable rating on Noble post weak earnings announcement and short-sell report by Iceberg.

S&P highlighted Noble’s improved financial leverage and strong liquidity position to mitigate weak earnings, and view the fair value accounting and mark-to-market of financial assets and liabilities as an ordinary part of operations for commodity-trading companies.

Lastly, it opines risk management measures are adequate.

Separately, Goldman in a report also said Noble’s sell-down seems overdone, given its strong core earnings in 2014.

On outlook, the house thinks higher coal price volatility, oil contango and favourable oil fundamental trading dynamics, rising contribution of energy and lower working capital requirements are all positives for Noble.

In fact in the longer term, the company’s lower gearing post its Agri disposal leaves it with an asset light model, which puts it in good stead to ride out the current downturn in commodities.