Singapore’s most popular short is turning into a great way to lose money.
Noble Group has soared since Oct 8, when bearish bets peaked at a record 15.1% of the company’s outstanding shares. The commodity trader is up 25% this month, the most since May 2008. The rebound pared its 2015 loss to 54%, still the worst on the Straits Times Index.
What had been a winning bet for short-sellers unraveled this month as Noble got fresh funding from its lenders and speculation mounted that the worst of the collapse in commodity prices was over. Bears seem to view the share jump as temporary, with the short-interest ratio remaining elevated at 14.8%, Markit Group data show. For Jupiter Asset Management, which owns Noble stock, that’s another positive sign.
“Should commodity prices go up, a lot of those shorts will get covered, lifting the share price,” said Ben Surtees, a London-based fund manager at Jupiter Asset. “We did get to oversold levels about a month ago and we’ve probably seen the worst of that.”
Pacific Investment Management Co. said this month the worst of the commodity collapse is probably past, after a 26% tumble in raw-materials prices in the 12 months through September that saw investors shun stocks in related industries. Glencore Plc rallied 21% in London this month after a 38% plunge in September. Wilmar International gained 21% in Singapore, paring its 2015 drop to 3.7%.
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Noble Group has soared since Oct 8, when bearish bets peaked at a record 15.1% of the company’s outstanding shares. The commodity trader is up 25% this month, the most since May 2008. The rebound pared its 2015 loss to 54%, still the worst on the Straits Times Index.
What had been a winning bet for short-sellers unraveled this month as Noble got fresh funding from its lenders and speculation mounted that the worst of the collapse in commodity prices was over. Bears seem to view the share jump as temporary, with the short-interest ratio remaining elevated at 14.8%, Markit Group data show. For Jupiter Asset Management, which owns Noble stock, that’s another positive sign.
“Should commodity prices go up, a lot of those shorts will get covered, lifting the share price,” said Ben Surtees, a London-based fund manager at Jupiter Asset. “We did get to oversold levels about a month ago and we’ve probably seen the worst of that.”
Pacific Investment Management Co. said this month the worst of the commodity collapse is probably past, after a 26% tumble in raw-materials prices in the 12 months through September that saw investors shun stocks in related industries. Glencore Plc rallied 21% in London this month after a 38% plunge in September. Wilmar International gained 21% in Singapore, paring its 2015 drop to 3.7%.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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