KFM Weekly Investment Update: Friday, 02 May 2014

Local Market Summary

• City Pharmacy Limited (CPL) announced a dividend of 7 toea was declared for the year 2013 to be paid in two equal tranches of 3.5 toea on the 19th May 2014 and 18th August 2014, CPL chairman, Mahesh Patel explained to shareholders that CPL Group announced at the annual AGM. Resolutions to re-elect Messrs Smare and Sudhir and reappoint Deloitte as auditors were passed.

• Steamships Trading Company has announced a Profit After Tax of K117.1 million for 2013, K6.6 million less than 2012 profits. The fall in profit was due to decreased activities in both the project cargo and liner trade volumes in Papua New Guinea’s key commodity and resource industries.

• Northern Governor Gary Juffa, claims that activities undertaken by Nautilus Ltd in its Solwara 1 Project in New Ireland are illegal and there is or was no legislation that would sanction or permit such actions. Under the newly reached agreement, the State will take a 15% stake in the mine by contributing $120m (K327 million) towards the costs of the operation.

• PNG Sustainable Development Program (PNGSDP), under Sir Mekere Morauta stressed that it acted within the law to remove the representatives of the State and people of Western Province from its board by amending the Article of Association. This move by the PNGSDP will be referred to the Singapore court, and also the police to deal with to ascertain if any criminality was involved.

• The Teachers Savings and Loans Society (TSL) reported a 17% decline in its profits for the 2013 financial year. Finance and accounts division Acting Manager Porua indicated that the decrease in profit was mainly due to the drop in the BSP share price of which TSL is shareholder.

• Nambawan Super Ltd Chief Operating Officer Charlie Gilichibi stated in a superannuation contributions conference, that the misinformation around the 30% tax deducted from members’ savings who contribute to Nambawan Super Ltd is not correct. He stressed that the only contributions that are taxed are the employer contributions and accumulated interests.

• The bids in the Bank of PNG’s Central Bank Bills and Treasury Bills Auctions were undersubscribed and oversubscribed respectively. With the yields for Treasury bills slightly higher from the previous week. The weighted average yield (WAY) for 182 and 364 day Treasury Bills were 3.60% and 5.88% respectively.

• The European Union Commissioner for Development, Andris Piebalgs, paid a courtesy call to Prime Minister Peter O’Neill at his Parliament House office in Port Moresby. The purpose of his visit was to hold discussions with the Prime Minister, the Foreign Affairs Minister and other relevant agencies on development cooperation and the signing of two new projects on human resources development and on rural economic development.

• The KSi Index closed the week slightly lower by 0.1% on 3,654.73 while the KSi Home Index also closed the week lower by 0.5% at 8,087.33.

International Market Summary

• ANZ announced half-year profit of $3.5 billion. The bank’s preferred measure – the cash profit-rose 11% in the six months to the end of March, beating the consensus forecast from analysts of about $3.4 billion. The company has also announced an interim dividend of 83 cents a share. (See price chart – left in the PDF attachment below)

• The Australian dollar is under pressure as talk of possible tax hikes in the government’s budget fuels expectations that interest rates will stay on hold for a longer period.

• European court rejects UK challenge on Tobin Tax. A blow to the City as the European Court of Justice rejects Britain’s legal challenge to the introduction of an EU financial transactions tax.

• The PNG Kina was unchanged against the USD and AUD.

• In world oil prices the Brent crude declined by 1.6% to US$107.86 a barrel while Light crude also declined by 1.2% to US$99.41.

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

pdfKFM Weekly Investment Update: Friday, 02 May 2014

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