Noble shares take second-day drubbing
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Noble Group's shares faced a second wave of selling despite analysts' skeptical view of an anonymously written critical research report comparing the company to Enron and assigning a 10 Singapore cent price target. "Neither of those was really supported in the document," Conrad Werner, head of research at Macquarie , told CNBC. Iceberg Research published a report headlined "Noble Group , a repeat of Enron," and saying more critical reports are on the way. The report alleges that the Singapore-listed commodities trader's accounting treatments were "unusual," result in "fabricated" profit and "intentionally misleads credit agencies and investors." In a statement to the Singapore Stock Exchange Monday, Noble said it "completely" rejected" the allegations, adding that all the information cited in the report was in the public domain. After the market close, Noble issued an additional statement via SGX, disputing several of Iceberg's assertions and noting it had "a solid balance sheet and industry leading liquidity headroom." Read More Are short sellers gunning for Singapore again?

That didn't support the share price, which closed down 5.4 percent at 1.05 Singapore dollars in mid-day Tuesday trade after dropping 7.9 percent Monday. Interestingly, Iceberg agreed with Werner's assessment, saying in emailed comments Tuesday that its first report didn't support a comparison with Enron, but advised staying tuned for its second and third reports. Werner specifically criticized Iceberg's assessment of Noble's 13 percent stake in Australia-listed coal company Yancoal. Iceberg claims Noble is valuing its stake at 55 times the market value of its stake, but Werner noted this has largely been true since Yancoal was listed in 2012.



Yoshikazu Tsuno | AFP | Getty Images

Noble wrote down the value of the stake in 2013 and with coal prices remaining weak, another writedown may be on the cards this year, Werner noted. "But Iceberg are suggesting that the whole asset needs to be written down to zero, which we think is sensationalistic and an extreme conclusion," Werner told CNBC. Noble weighed in on the valuation question. "The carrying values of our associates, including Yancoal, are tested for impairment using discounted cash flow models that are updated every quarter," it said in Tuesday's filing with SGX, adding that the valuation is currently being audited for its upcoming results release.

In a report, Macquarie noted Noble uses a financial model to value the stake, a process reviewed by its auditors Ernst & Young, to compensate for the thin trading in Yancoal's shares. The stake is currently valued at $677 million on Noble's balance sheet, compared with a stock market value of $11 million, Macquarie said. But Iceberg appears unwilling to accept the use of a financial model. "You cannot seriously explain a $600 million gap by saying shares are thinly traded," it said in an email that used the first-person "I," in a departure from Monday's use of "we." Macquarie, which is sticking with its Outperform rating and 1.60 Singapore dollar target price on the stock, isn't the only one questioning Iceberg's analysis of Noble.

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