KFM Weekly Investment Update: Friday, 02 December 2016

Local Market Summary

• Prime Minister Peter O’Neill has confidently maintained his stand that the country’s economic growth is steadfast and maintained by the government. In a press conference after returning from the APEC Summit in Peru, PM O’Neill said the 21 APEC country leaders have confidence in PNG for hosting the APEC in 2018. He further added that all the leaders of the 21 APEC countries have agreed to attend the APEC Summit in 2018

• Further, PM O’Neil has raised the prospect of establishing direct flights from PNG to Thailand. In a bilateral meeting with Thailand’s Deputy Prime Minister and Air Marshall, Prajin Juntong, on the sidelines of the APEC Leaders’ Summit in Lima. PM O’Neil further raised the prospect of Thailand purchasing future LNG production from PNG and establishing greater cooperation on fisheries

• Repsol has confirmed its commitment to PNG during a meeting with Petroleum and Energy Minister Hon. Nixon Duban in Brisbane. Repsol, a Spanish integrated oil and gas company, holds 10 licenses in PNG, nine in Western and one offshore in the Gulf of Papua through the acquisition of Talisman Energy. The use of gas for domestic power generation could help transform PNG’s economy, improve the balance of payments by replacing imported liquid fuels with clean, locally-produced natural gas and provide affordable electricity to towns and villages

• The National Development Bank (NDB) has opened its sixth People’s Micro Bank branch in Kimbe, West New Britain Province (WNB). Mr Moses Liu, NDB’s Managing Director said, more than K20 million in loans have been given to the people of WNB

• Total E&P PNG says the company is committed to delivering the Papua LNG in Gulf. Total is the operator of the Elk and Antelope fields. It remains the largest shareholder in PRL 15 with a 31.1% interest. The partners are Oil Search and InterOil with 17.7% and 28.3% respectively, with the government back-in right of 22.5%. Total, as operator of PRL15, is committed to cooperating with the PNG LNG project to maximize the value of Elk and Antelope fields for the benefit of the country and the shareholders of PRL-15

• Total’s tentative project schedule indicates that it will have the first LNG cargo in 2023. According to information provided during a roadshow hosted by Total in Port Moresby, construction and commissioning had been proposed to be between 2019 and 2022

• The K92 mine has announced the initial results of its ongoing grade control drilling of its high-grade K92 gold mine in EHP. The programme is currently in the start- up phase. CEO Mr. Ian Stalker said the results have significantly increased both the predicted grade and contained gold ounces in the first two production stopes

• ST Barbara chairman Mr Tim Netscher says 2016 has been an excellent year for the company. St Barbara is the operator of the Simberi gold mine in New Ireland. Addressing shareholders and company directors at the annual general meeting in Melbourne. Netscher, said he was proud to report such good results in his long and varied career in mining

• Kina Bank’s CEO Mr Sydney Yates has announced the appointment of Mr Tony de la Fosse as Executive General Manager for Shared Services with effect from 1 December 2016. Mr Yates said that Mr Fosse has extensive senior level experience in corporate services having served throughout various public services departments in Australia and Papua New Guinea such

• HDGC TuguyawiniLibe Parindali has congratulated John Bethink-Jones on his appointment as new CEO of Anitua Group of Companies. Mr. Parindali said in his role as Group manager of Nationwide Catering Services and director ofHidesAlliance Group, Mr. Gethin-Jones played a key role in the growth and success of Hides Alliance Group. Hides Alliance Group is a joint venture company between NCS and HGDC Ltd providing catering and camp services to ExxonMobil PNG owned campus in PNG LNG Project

• This week’s auctions in Central Bank Bills were undersubscribed by K83.1m out of K928.5m offered. The weighted average yield for 28 days was at 1.18% while the 63 days remained unchanged at 2.35%

• This week’s BPNG auctions in Treasury Bills were undersubscribed by K71.0m out of the K204.8m on offer .The weighted average yield for 182 days and 364 days remained unchanged at 4.72% and 7.73% respectively

• The KSi Index ended the week up by 0.4% to close at 4,790.80 points, supported by an increase in share price of Highlands Pacific (+5.6%) and Oil Search (+1.2%) while the KSi Home Index was down by 0.1% to close at 10,635.11 points underpinned largely by a fall in share price of Credit Corporation (-0.5%)

International Market Summary

• Global markets were led higher by energy stocks earlier in the week following OPEC’s decision to cut production by 1.2 million barrels per day (or 4.5% of current production). The organization led by Saudi Arabia has opted to reduce production (for the first time since 2008) in an effort to curb the global supply glut and expedite the recovery of oil prices

• European shares were lower as investors continued to reduce equities following renewed expectations of higher bond yields

• Asian markets came of the top following the oil-led rally subsequent to the OPEC agreement as the market took profits

• PGK/USD remained unchanged for the week to close at 0.3150, PGK/AUD rose by 0.5% for the week to end at .4253, while AUD/USD depreciated by 0.7% to end the week at 0.7407

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pdfKFM Weekly Investment Update: Friday, 02 December 2016

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