KFM Weekly Investment Update: Friday, 15 July 2016

Local Market Summary

• The Asian Development Bank (ADB) released its biannual Pacific Economic Monitor report highlighting the challenges Papua New Guinea continues to face despite being the Pacific sub region’s largest economy. The ADB expects sluggish economic growth of 4.3%in 2016 and 2.4% in 2017. ADB’s country economist Yurendra Basnett said the slowdown is driven by ongoing fiscal consolidation with lower growth projections for 2016

• The National Fisheries Authority (NFA) has successfully acquired the Bank of South Pacific building in Port Moresby’s CBD. NFA Managing Director, John Kasu said it was a milestone for the company in its efforts to acquire its own property. Mr Kasu added that the acquisition was in line with the company’s vision to have its own office instead of renting other offices

• Air Niugini announced plans to introduce direct air services to China following the recent signing of a historic air services agreement. Air Niugini Chairman, Sir Frederick Reiher said the agreement will not only benefit customers but also strengthen ties between China and PNG. Sir Fredrick added that the airline intends to commence services from late 2017

• PNG Air has announced the first issuance of shares to its long serving employees under its employee share scheme. About 167 employees were issued shares of which 65 served the company for more than 10 years. Mr Muralee Siva the Chief Executive Officer (CEO) said the airline’s board was happy to see long serving employees become shareholders and the practice will help retain staffs and for them to be loyal to the company. The two major shareholders are MRDC representing the landowners and NASFUND, representing contributors from private sectors

• Kumul Mineral Holdings Limited (KMHL) Chairman Sir Brown Bai has asked for the immediate transfer of the State’s mineral assets to the entity during a recent event to mark the change of name from Petromin Holdings to KMHL. He said KMHL currently has one investment in Solwara 1, and that moving forward KMHL
has to take on other State assets in that field, particularly Bougainville Copper and Ok Tedi

• Mr Charles Dambui was confirmed by the National Government as CEO for Coffee Industry Corporation (CIC) for a four year period. With 10 years’ experience in agriculture particularly coffee and a short time with cocoa industry he perseveres to regain confidence from the stakeholders. In his effort to rebuild confidence he pursues the following activities; reviewing procedures and policies, drive Small
Medium Enterprise, align policies to meet market expectations, work hand-in-hand with stakeholders and work with coffee growing districts

• Mr Deepak Gupta was appointed by Kina Securities Limited (KSL) as the Executive General Manager-Wealth whilst Chetan Chopra as the Chief Financial Officer. Mr Yates the CEO for Kina confirmed the appointment will strengthen the existing senior management team. Mr Gupta holds a Bachelor of Commerce and Administration from Victoria University and MBA from Massey University, New Zealand. He brings with him a wealth of experience from a variety of senior executive roles in leading financial service institutions including Westpac, AMP and domestic New Zealand institutions

• Bank of South Pacific Chairman, Sir Kostas Constantinou announced the appointment of Arthur Sam as a new addition to the Board of Directors. Mr Sam isthe Audit and Managing partner of JAJ & Associates with a wealth of experience including having worked at three of the big four global accounting firms. Sir Kostas welcomed Mr Sam’s appointment in line with the Bank’s board renewal process

• This week’s BPNG auctions in Central Banks Bills were only offered for 28 day maturities with an over-subscription of K589.0m out of a total of K357.0m on offer. The weighted average yield dipped to 1.07%

• Auctions in Treasury Bills were under-subscribed by K86.1m from a total offer amount of K161.5m. Weighted average yields remained unchanged from the previous auction results at 4.7% for 182 days and 7.7% for 364 days

• KSi remained unchanged for the week to close at 4,630.16 points, the KSHi was up 0.5% to end at 9,766.94 points supported by an increased in banking stock Bank of South Pacific up 0.6% to end at K8.20

International Market Summary

• On Thursday, U.S. stocks rose to all-time highs since 2014, with the S&P 500 Index marking its longest winning streak in four months amidst Earnings and Stimulus optimism

• Stocks across Europe advanced Thursday, remaining on higher ground after the Bank of England surprised markets by holding its key interest rate unchanged, in the central bank’s first monetary-policy decision after the UK’s historic Brexit vote

• Global equities also surged on Thursday as positive news came out from Asia and Europe. Speculation grew that Japanese Prime Minister Shinzo Abe contemplating so-called helicopter money policy and the Bank of England taking necessary steps required to safe guard its economy in light of the Britain’s vote to leave the European Union

• The ASX 200 ended the session at 5429.57 points, up 3.8% for the week. Three quarters of the top 200 names ended the week higher, showing the broad improvement in risk appetite after the Brexit scare (refer graph)

• Gold had another disappointing session, dipping $10 to US $1,332 an ounce. That took its decline from a two-year peak reached on Monday to $43.0

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pdfKFM Weekly Investment Update: Friday, 15 July 2016

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