KFM Weekly Investment Update: Friday, 05 September 2014

Local Market Summary

• Information from the Investment Promotion Authority shows that Malaysian firms have invested in all three sectors of the PNG economy. According to the Malaysian diplomatic office, its investment in PNG is among the highest in terms of value. Last
year, proposed investment recorded at K6.3b mainly concentrated in wholesale and retail, financial intermediation, forestry, manufacturing and agriculture.

• All state- owned entities are in the process of being restructured by the National Government to build capacity and take advantage of the mineral and resources projects, Prime Minister Peter O’Neill said this week.

• Parliament has passed the Public Private Partnership Bill that will ensure government partner with private sector in the provision of public infrastructure and government services in the country.

• The biggest dry-dock facility in the southern hemisphere is been constructed by Curtain Brothers PNG Ltd and work has already started. The facility is expected to generate millions of kina, according to General Manager Justin McGann.

• Air Niugini reduced domestic air fares by 50% as the government confirmed its intention to sell 49.0% of the airline so it remains viable and competitive.

• Kina Asset Management Ltd (KAML) recorded an income of K1.6m in the first half of 2014, which lifted KAML’s investment portfolio to K50.8m. This was largely attributed to the increase in share prices for KAML’s Key Investments.

• A new product called ‘Family Life’ has been launched through a recent partnership arrangement by Digicel, Bima and Capital Life Insurance company. Family Life is a life insurance made easy and affordable for Papua New Guineans to access insurance
and provides a safety net for their family.

• The unaudited profit after tax for Steamship Ltd for the first half year was K51.1m, an increase of K20.3m or 66.1% in compared to the previous corresponding period.

• The Kina Facility Rate for the month of September 2014 remained at 6.25%.

• This week’s BPNG auctions in Treasury Bills were over subscribed by K13m with slight increases in both 182/364 days weighted average yields rate from last week; 4.5% and 7.2% respectively.

• The KSi index was flat for the week at 3,733.9 while the KSi Home Index was up 0.4% at 7,933.6 for the week.

International Market Summary

• Chinese manufacturing activity growth declined in August, losing momentum for the first time in six months after reaching its highest level in more than two years. The official purchasing managers index (PMI) closed at 51.1 in August, according to
the National Bureau of Statistics. The figure was down from 51.7 in July, and the first decline since slipping to 50.2 in February 2014 (see chart in the PDF attachment below).

• The European Central Bank (ECB) unexpectedly cut its benchmark interest rate by 10 basis points to a record 0.05% to boost the region’s economy. The central bank will also start buying assets, easing the flow of funding for the region’s economy
while holding back for now on larger-scale action.

• The Reserve Bank of Australia on Tuesday kept interest rates on hold at 2.5%, as it again noted slack in the job market and rising house prices, while introducing concerns about the Chinese property market.

• US stocks have closed lower despite an early boost from the ECB’s move to further cut interest rates and launch an asset-purchase plan to beat back deflation pressures. The Dow Jones Industrial Average was down 8.7 points (0.1%) to 17,069.6. The broad-based S&P 500 slipped 3.07 (0.2%) to 1,997.7, while the tech-rich Nasdaq Composite Index fell 10.3 (0.2%) to 4,562.3.

• For the week, Nikkei has gained 2.0% as the dollar rose to a six-year high against the yen, supported by the European Central Bank’s latest monetary easing. The weaker yen helped exporters such as Toyota Motor Corp and Honda Motor Co.

• Gold, Brent crude and Light Crude declined by 2.0%, 1.3% and 1.4% respectively to U$1,262.20, US$101.8. and US$94.57.

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

pdfKFM Weekly Investment Update: Friday, 05 September 2014

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