KFM Weekly Investment Update: Friday, 21 April 2017

Local Market Summary

• Minister for Petroleum and Energy Nixon Duban said PNG earns US$50.0m (K160.0m) from every shipment of PNG Liquefied Natural Gas (LNG) export. Mr Duban announced during the final disbursement of seed capital to community-based organizations in Madang district that the PNG LNG project in Hela was under a 40-year contract as planned by the PNG government. The States vision is to move the country into the next 40 years which tags the economic transition period

• PNG Chamber of Commerce and Industry President John Leahy said, links between Chinese and PNG companies could result in positive developments. He told a trade delegate from Guangzhou, China at a business seminar that there were number of sectors that had the potential for advancement through Chinese involvement. Meanwhile, China Council for Promotion of International Trade Guangzhou president Wang Zudong signed a memorandum of understanding with PNG chamber of Commerce and Industry

• According to the World Bank’s forecast for the East Asia and the Pacific Region, the outlook for developing East Asia is expected to remain broadly positive in the next three years. The Bank released East Asia and Pacific Economic Update said this would be driven by robust domestic and the gradual recovery of the global economic and commodity prices

• The World Bank further updated that the country’s Gross Domestic Product is expected to rise 3.0% in 2017, an increase by 0.2 annually. In its East Asia and Pacific Economic Update 2017 the increase followed a substantial drop of 2.4% of economic growth in 2016 from 6.8% in 2015. Growth in the nonresource sector contributed 2.3% points to overall growth in 2016 while the resource sector contributed 0.1% points

• The PNG Consumer Watchdog signed memorandum of understanding (MOU) with the Morobe and Manus provincial governments. The agreements signed with the Independent Consumer and Competition Commission (ICCC) will enable it to have its presences in the two provinces. This is through a business development officer who will perform its role in the provinces. Acting CEO Avi Hubert said that the MOU signified ICCC’s intent to increase its footprints across the country

• Puma Energy advised all its valued customers that they have re-commenced supply of unleaded petrol and zoom sales as of today from all their facilities. Puma Energy sincerely apologised and thanked its valued customers for the patience and understanding

• Oil Search (OSH) recorded a production of 7.57m barrels of oil equivalent (mmobe) in the first quarter of 2017. OSH said this was in line to deliver the 2017 production within the 28.5-30.5 mmobe guidance range. PNG LNG project production was
6.07 mmobe comparing against the world class which was 26.3bn bcf of LNG, 0.2 bcf of gas for power and 0.88mmbl of liquids. MD Mr Peter Botten said the PNGLNG project operated at an annualised rate of 8.3 MPTA during the quarter which was some 20.0% above the name plate capacity of 6.9 MTPA

• Chairman of Bank South Pacific Sir Kostas Constantinou said BSP has not ruled out undertaking a secondary listing on the Australian Securities Exchange (ASX) potential listing. In a market release, its board is not of the view that there will be a significant public offer of shares regarding the potential listing on the ASX

• This week’s BPNG auctions in Central Bank Bills was offered for 28 days with an over-subscription of K120.0m out of a total of K125.0m on offer. The weighted average yield was 1.22% up from 1.21% from the previous week

• This week’s BPNG auctions in Treasury Bills were under-subscribed by K80.6m out of a total of K212.3m on offer. Weighted average yields for 91 days, 182 days and 364 days were, 2.55%, 4.73% and 7.82% respectively

• The KSi Index drop 0.9% to close at 5,537.60 points. While, the KSi Home Index increased by 0.2% to conclude the week at 11,073.92 points, reflecting an increase in share price of BSP and CCP by 0.1% and 1.1% respectively

International Market Summary

• Investors boosted the ASX into the black for the first time in four sessions. The benchmark S&P/ASX 200 Index closed down 0.6% to 5854.10 points and the broader. All Ordinaries Index finished up 0.2% to 5854.4 points

• US stocks finished higher as strong economic data and corporate earnings lifted the main benchmarks. The S&P 500 SPX climbed 17.67 points, or 0.8%, to 2,355.84, with financials and industrials leading the rally

• Japanese stocks rose to one and a half week highs on Friday as global investors bet that US tax reforms are getting back on track, but Fujifilm Holdings tumbled after it delayed its earnings release due to an accounting probe. Meanwhile, the Nikkei 225 share average gained 0.9% to 18,597.25 points by mid-morning, its highest level since April 12

• European shares edged higher as investors welcomed results from Man Group and Pandora maintained its outlook, while French equities outperformed ahead of the first round of France’s presidential election. The pan-European STOXX 600 index ended the session 0.2% higher on Thursday

• PGK/USD remained flat for the week to close at 0.3145, PGK/AUD appreciated by 0.8% to end at 0.4174 while AUD/USD depreciated by 0.8% to end the week


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pdfKFM Weekly Investment Update: Friday, 21st April 2017

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