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KFM Weekly Investment Update: Friday, 03 January 2014

Local Market Summary

• Bank of Papua New Guinea (BPNG) announced that PNG’s Balance of Payments (BOP) recorded an overall deficit of K1.26 billion for the nine months to September compared to K868m in the corresponding period last year. Governor Bakani noted that the deficit was attributed to a lower trade surplus and higher net service payments.

• Also, BPNG employment index identified that private sector employment Level declined by more than 3% in the September quarter corresponding with the Economic indicators available to the BPNG which have identified that the slow pace in economic growth continued through to the third quarter of 2013. The findings were reported in BPNG’s quarterly economic bulletin for September 2013.

• PNG Power announced that the Independent Consumer and Competition Commission (ICCC) approved an increase in electricity tariffs by 5.9%. This has been made effective as of 1st January 2014.

• NCM rallied more than 8% to $8.64 on the Australian Securities Exchange (ASX) on Thursday following a 1.6% rebound in the gold future which followed by an upsurged in other equities in the material sector. Institutional investors including CBA and Blackrock have expressed better views on the outlook of the gold company. (Refer to graph in the PDF attachment below).

• St Barbara Executive GM Corporate Services Ross Kennedy in a recent seminar said that in the last financial year Simberi had invested about K102m in infrastructure improvements. He also stated that, Simberi’s economic contribution in 2013 included K3.8m, which was 2.25% of gold revenue, royalty payment and Mineral Resources Authority levy.

• New Guinea Gold (NGG) has agreed in principle to claim total ownership of Sinivit Gold Project (in East New Britain) by acquiring its ordinary shares from New Guinea Holdings. NGG will update the investors on the status of the deal.

• Horizon Oil (HZN) has honoured its deal to sell 40% of its PNG gas to Osaka gas (for US$204 million) who has the engineering capabilities in the LNG projects. According to HNZ Chief Executive Officer, HZN was seeing significant value in its PNG assets.

• KSI was flat at 3,871 while KSI Home Index was up 0.1% for the week at 8,180.

International Market Summary

• US stocks fell on their first day of trading in 2014 as investors booked profits in the wake of the S&P 500’s best yearly advance since 1997, with many of last year’s strongest performers down on the day.

• Australian capital city house prices rose by almost 10 per cent last year, the highest yearly growth in four years, as record low interest rates increased buyers’ appetites for residential property.

• China’s official nonmanufacturing Purchasing Managers’ Index fell to 54.6 in December from 56.0 in November, according to a statement on Friday from the China Federation of Logistics and Purchasing

• Oil (Brent) price was down 3.9% at US$107.83 and light crude also closed 5.1% lower at US$95.22 for the week.

• Gold closed 1.4% higher at US$1,230.90 for the week.

• During the week the Kina depreciated against both the AUD by 1.3% to 0.4434 and USD 0.1% to USD0.3980.

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

pdfKFM Weekly Investment Update: Friday, 03 January 2014

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