NOBLE rallies on US$1 b sale of energy unit, Penny stocks in play

Noble Group managed to sell its US Energy unit at US$ 1bn

LQM 0094FF The Noble Group agreed to sell its US energy unit to Calpine Corp for US$ 800 million plus working capital, estimated at an additional $248 million to Calpine Corp, according to the news reported this morning.

This deal marked an important step in completing the company’s $2 billion capital-raising initiative. This largely alleviated the concerns of a liquidity squeeze that the company has faced during commodities slump, and may aid in Noble Group’s turnaround.

It has also helped to explain the tremendous rally of Noble’s share price, which has surged more than 26% over last week alone.

The share price rally was accompanied by spiking volume, signaling that the retail and institutional investors are back in the market. Similarly, major shareholders have been boosting their stakes in the third quarter as well.

-- Margaret Yang Yan, CFA

Market Analyst

CMC Markets Singapore

LQM ad141e The recent small mid cap seems to be as hot as the China property market.

For example, Geo Energy Resources has risen almost 90% from $0.090 on 3 Aug to $0.170 last Fri. Some clients who do not typically trade are starting to pile into the market. They are buying small cap or penny stocks (which have already surged a lot) for the hope of selling them at higher prices.

SDJ1.16a SDJ coal mine of Geo Energy Resources. Photo: CompanyWith reference to my write-up on 23 Sep 2016 (see HERE), I wrote that I continued to be cautious on the general market, while remain positive on selective stocks. Since 23 Sep, I have taken profit and reduced my allocation from around 54- 55% invested in the market to around 24% as on 7 Oct 2016.

I reiterate my cautious stance in the general market while remain ready to accumulate selective stocks on weakness.

-- Ernest Lim, CFA, CA Singapore

Counter Name	Last	Change
AEM Holdings	2.370	0.020
Best World	2.470	0.010
Boustead Singapore	0.960	-
Broadway Ind	0.129	0.001
China Aviation Oil (S)	0.935	0.030
China Sunsine	0.410	-
ComfortDelGro	1.490	-
Delfi Limited	0.900	-
Food Empire	1.270	0.020
Fortress Minerals	0.310	-
Geo Energy Res	0.315	0.005
Hong Leong Finance	2.500	-
Hongkong Land (USD)	3.100	0.070
InnoTek	0.530	0.005
ISDN Holdings	0.310	0.005
ISOTeam	0.042	-0.001
IX Biopharma	0.043	-
KSH Holdings	0.245	-0.005
Leader Env	0.051	0.001
Ley Choon	0.046	0.003
Marco Polo Marine	0.067	0.002
Mermaid Maritime	0.142	0.004
Nordic Group	0.340	-
Oxley Holdings	0.089	-
REX International	0.137	0.001
Riverstone	0.825	0.025
Southern Alliance Mining	0.445	0.015
Straco Corp.	0.490	-
Sunpower Group	0.210	0.010
The Trendlines	0.069	-
Totm Technologies	0.022	-
Uni-Asia Group	0.830	-0.005
Wilmar Intl	3.490	0.040
Yangzijiang Shipbldg	1.780	0.060