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Tuesday, April 2, 2013

Noble's shares "cheap on all counts": CIMB


After Noble's (N21.SG) shares languished for the past year amid slower economic activity, heightened risk aversion and earnings disappointments, its fortunes could be turning, CIMB says.

"Unloved and under-owned, any hint of positives from earnings momentum or a return of investors' risk appetites could spark its rerating." It adds, the stock is "cheap on all counts," not just against its historical trading band, but also compared with peers on both P/E and P/BV.

If the IMF's projections for 2013-14 global growth to accelerate materialise, Noble should benefit as a proxy for global economic growth, it says.

"Higher economic activity and consumption will spur demand for raw materials, leading to improved earnings." CIMB expects stronger FY13 profit on a normalization of agriculture earnings after FY12 was hit by one-off events and on the impact of stronger economies on its energy and metals divisions' performances.

It rates Noble Outperform with S$1.47 target. The stock is up 1.2% at $1.23.

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