KFM Weekly Investment Update: Friday, 01 November 2013

Local Market Summary

• The Kina Securities Index (KSI) was flat this week by 0.1% to 3,898.96 and KSI Home Index fell 0.1% to 8,184.63 for the week.

• BPNG celebrated its 40th year anniversary during the week.

• The PNG Government has started the process of reviewing the acquisition of Oil Search Limited (OSH) shares, valued at K3 billion. In an instrument signed by the Prime Minister and Acting Secretary of the NEC instructed the IPBC and its successive organisation to raise funds in the capital markets (an estimated US$1.billion) to repurchase OSH shares through the redemption of IPIC bonds and negotiated at the best possible rate with Favourable conditions to PNG.

• PNG Government has intervened to prevent the “firesale” of investments owned by PNG Sustainable Development Program Ltd (PNGSDP). Prime Minister O’Neill in appointing a transitional management to stabilise the company also assured all staff to
return to work and that PNGSDP had funds to continue its programs.

• OK TEDI Mining Ltd (OTML) revenue declined from K4.54 billion in 2011 to K3.36 billion last year, the company’s 2012 report has revealed. The profits also dropped to K913 million last year compared to K1.24 billion in 2011.

• On Monday, 29th October 2013, Niuminco Group of Companies Limited was officially admitted as a dual listed security to the Port Moresby Stock Exchange (POMSoX). Niuminco Group of Companies holds mining leases at Edie Creek in the Morobe Province,
Papua New Guinea.

• Edai Town has been launched for development at a cost of K250 million by JC-KRTA Contractors of Malaysia, 155ha of land has already been leased by Boera Holdings.

• Ela Motors (EM) has invested in a million kina facility to boost Hino trucks and services in Papua New Guinea. EM opened a new Badili Hino truck shop to facilitate servicing and parts operation for customers and business partners. It is planning to do the same for the key markets of Lae and Mt Hagen.

• Marengo Mining Limited released its September Quarter Archives report. Highlights for the quarter included commencement of a diamond drill campaign, MoU signed with Madang Development Corporation and continuation of Feasibility Study.

• Xstrata has agreed to sell its stake in Frieda River to PanAust. Under the deal it has also agreed to take a A$5 million placement in Highlands Pacific at 7.76c a share. PanAust has a scaled down version for development of Frieda at a much lower capital cost.

International Market Summary

• China’s manufacturing activity grew at its fastest pace in 18 months in October, official data showed a positive sign from the world’s second biggest economy. The Chinese manufacturing sector grew at its fastest pace in seven months, lifted by new orders.

• The Eurozone unemployment rate remained stable at 12.2% in September, the same as the upwardly-revised August reading, a record high. The number of unemployed rose to 19.4m. While production levels are rising slowly, companies are still shedding

• The Reserve Bank of Australia (RBA) does not think a housing bubble has formed but is keenly aware of the chances that it might, Governor of the bank Mr Glenn Stevens noted.

• ANZ Bank Limited (ANZ) released its full year financial results as at 30th September 2013. Recording a record-breaking profit of A$1.37 billion (K2.98 billion) which is up 8% from the previous years.

• National Australia Bank (NAB) posted A$5.9 billion profit for the year which was up 9% for the year.

• Gold prices lost more than 1.5% to settle in the low-USD 1320s on Thursday, while silver prices were down more than 3% to slip below USD 22. After the recent rebound in gold prices, short-term oriented investors are already leaving the market again. Gold closed the week at USD1,325.80 for the week.

• Oil prices continued to head lower amid news that Libya may ramp up oil exports again in the coming weeks. Brent fell below USD 109 while WTI held above the important USD 96 technical support.

• In currency, the Kina appreciated against the USD and AUD for the week closing USD0.3826 and AUD0.4035 respectively.

Click on the link below to view full report in PDF.

pdfKFM Weekly Investment Update: Friday, 01 November 2013

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