KFM Weekly Investment Update: Friday, 03 October 2014

Local Market Summary

• Central Bank Governor Mr Loi Bakani called on the Government to make funds available for agriculture and other non-mineral sectors in the 2015 National Budget. Mr Bakani expressed this when giving his speech on the Monetary Policy statement at the September Monetary Policy breakfast in Port Moresby. Mr Bakani further stressed that building strategic infrastructure like highways enhanced the development of the agriculture sector and local businesses.

• The O’Neill-Dion government expressed it’s full commitment to invest in Financial Institutions providing convenient banking services to the vast rural communities of PNG . In line with the governments focus, Trade, Commerce and Industry Minister Hon. Richard Maru, will present a cheque of K9.0million to the National Development Bank to build micro bank branches in Tari, Aitape and Arawa.

• Papua New Guinea (PNG) and the United States (US) are becoming important sources for Japan’s Liquefied Natural Gas (LNG) supplies in the years to come. Japan being the world’s largest importer of LNG is forecasted to have a strong demand for LNG commencing 2015 to 2020. The first shipment of LNG from PNG to Japan was four months ago.

• On the 30/09/14, New Britain Palm Oil (NBO) share price fell by approximately 13.5% to GBP3.68 on the London Stock Exchange. The volume of shares traded was around 125,000. The performance of the share price could be the market’s reaction to the vital factors, including the fact that Kulim Bhd had announced to the market that its exclusivity agreement with Sime Darby expired on 28/09/14 and Sime Darby opted not to buy Kulim’s 49.0% stake in NBO without giving any reasons.

• Oil Search (OSH) confirmed that shares issued under the dividend reinvestment plan (DRP) for the interim dividend will be paid to shareholders at the price of A$8.94 (K18.94) per share. Mr Stephen Gardner the Group secretary stated that the DRP price is calculated in accordance with the DRP rules.

• Effective 03/10/14, the Board of Bank South Pacific (BSP) has increased the buyback threshold from a maximum of 1,000 BSP shares per holder to 5,000 BSP shares per holder. All other terms of the buyback remain unchanged.

• The securities of Airlines PNG (CGA) are currently suspended from official quotation at the request of the company. The company advised that it was currently engaged in negotiations that would have material impact on the company. POMSoX has advised that the voluntary suspension will remain in place until the company makes a market release on 31/12/14.

• This week’s BPNG auctions in Treasury Bills were over subscribed by K41.0m with slight increases in both 182/364 days weighted average yields rate from last week to 4.5% and 7.3% respectively.

• The KSi index was down by 0.6% at 3,725.55 while KSi Home Index declined to end the week at 8,147.01 down by 5.2%.

International Market Summary

• US stocks stabilized, with the S&P 500 inching out of its three-day slump, as investors brushed off heavy selling in overseas markets. The S&P ASX 500 closed 1.8% lower at 1,946.2.

• European stock markets deepened their recent slump, led by sharp falls in bank shares, after the European Central Bank disappointed some investors who had hoped for firmer hints that it is moving toward a program of large-scale government
bond purchases.

• According to HSBC the recent rally in the US dollar is temporary made more drama by other countries’ efforts to weaken their currencies against a range of trading partners. The AUD is buying 0.8794 USD down 6.1% for the month (see chart in the PDF attachment below).

• Gold was down by 0.2% to U$1,212.9 while both Brent and Light Crude declined by 3.3% and 2.1%, respectively.

• To end the week the PGK depreciated against both the AUD and USD by 0.6% and 0.2% respectively.

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

pdfKFM Weekly Investment Update: Friday, 03 October 2014

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