PwC review not enough to quell market doubts against Noble, analysts warn

It will take time to convince skeptics.

Noble Group’s contested fair values are not yet off the hook, despite the fact that PwC has confirmed that it is in compliance with the requirements of IFRS13 and standard industry practices.

According to DBS, the market may remain skeptical given that the conclusions from the PwC review were already expected.

Skeptics will also not be easily swayed because t Noble was unable to disclose specific assumptions for its models due to competitive reasons.

“While we take comfort from the rigorous manner in which Noble conducts its valuations as disclosed in the PwC report, we believe it may not be sufficient to regain the market’s confidence in the near term, given the lack of specific model assumptions, still weak cashflows (-US$832m in 1H15), and low ROE (2% on 12 month trailing basis),” said DBS.