KFM Weekly Investment Update: Friday, 25 September 2015

Local Market Summary:

•The Independent Consumer and Competition is planning to modify its current monitoring
arrangements to allow it to monitor the relative changes in retail margin over the next
regulatory period. One of the proposed changes would be to monitor the ex-factory gate
weighted average price (inclusive of all discounts) of Trukai and the Roots brand in retail
shops around the country

•National Petroleum Company PNG (NPCP) Managing Director, Mr Wapu Sonk confirms
that it will not undergo a restructure when it changes to Kumul Petroleum Holdings. He
further confirmed that NPCP would operate as Kumul Petroleum Holdings once the
gaze/al of the Kumul Petroleum Holdings Act was effected

•Petromin PNG Holdings has announced that it has begun adjusting as part of its conversion
to Kumul Minerals Holdings Ltd. Managing Director, Mr Thomas Abe said that pursuant to
the organisation restructure, existing functions would be merged into three functions.
Current staff numbers would be reduced by up to 50.0% with redundant staff receiving a
redundancy payment in addition to their statutory entitlements. Abe also stated that
challenges facing Petromin are the same as those facing other industry participants such as
Ok Tedi and Oil Search, who have already implemented the appropriate measures

•According to Fisheries Minister Hon Mao Zeming, the government has introduced
measures to stop the mass imports of cheaply produced canned fish to PNG. He further
confirmed that the National Fisheries Authorities was instructed to increase the value of
fish processed in PNG by 2016 as a condition of Licence for access to fish in PNG waters

•Petroleum Resources Kutubu Ltd (PKR) will be paying out a dividend of K40.0m to its shareholders
as announced by Mineral Resources Development Company Managing Director
Mr Augustine Mano. Mr Mano further stated that the 2014 final dividend payment was
approved by the PRK board, with 40.0% to be distributed to the Gulf and Southern Highlands
while the remaining 60.0% would be allotted to the Fasu, Foe and Kikori landowners

•Mineral Resources Development Company says the total value of its Star Mountain Plaza in
Port Moresby is almost K1.1bn. Managing Director, Mr Augustine Mano said the first phase
which included the Hilton Hotel and convention centre would cost about K700.0m. Construction
was already underway and expected to be completed by late 2017 in order to host the APEC Leaders’ summit which is set for 2018

•Puma Energy’s K4.0b import tax liability on crude oil import is currently undergoing an
independent audit by the PNG Government. The purpose of the audit is to review the PNG
Customs and IRC records and to reconcile against the records of Puma Energy to verify the
amount that Puma Energy owes to the State

•Oil Search recently signed a statement of intent with PNG Power for the next phase of the
Ramu power project. This follows after the announcement on April 1 of the start of continuous
24-hour power generation and supply to Tari. Managing Director, Peter Bo/en said
that Oil Search will continue to work with the PNG Government to develop long term
power solutions for PNG’s power sector

•Coppermoly has announced that it was granted a new consolidated exploration licence by
Mineral Resources Authority for a two-year term commencing Sept 11. Coppermoly’s
mineral exploration activities are focused entirely on the island of New Britain where it is
focused on exploring for and developing copper–gold-molybdenum deposits

•City Pharmacy Limited (CPL) Group added another branch to its expanding retail portfolio
when it opened its 32nd City Pharmacy store in Mt Hagen, Western Highlands

•This week’s BPNG auctions in Treasury Bills were oversubscribed by K14.9m out of the
K200.0m on offer. Weighted average yields were 2.4% for 91 days, 4.6% for 182 days and
7.4% for 364 days from this week’s auctions

•This week’s auctions in Central Bank Bills were undersubscribed by K100.0m out of
K523.0m on offer. The weighted average yields were 1.3% for 28 days and 2.2% for 63 days

•The KSi Index ended the week lower by 1.2% to close at 3,529.44 points while the KSi
Home Index rose by 2.1% to conclude the week at 9,726.96 points

International Market Summary:

•Asian shares slumped on Friday, while the dollar firmed after Federal Reserve Chair Janet
Yellen suggested the central bank is still on track to raise interest rates later this year

•Japan’s Nikkei ended a volatile session up 1.8%, but still gave up more than 1% in a holiday
-shortened two-day trading week. Data before the open showed Japan’s core consumer
prices marked the first annual drop since the central bank deployed its massive stimulus
program more than two years ago

•Australia’s S&P/ASX 200 was down 2.2% to close the week lower at 5,056.80 points

•Oil prices swung around $45 this week as investors grapple with conflicting signs of an
easing glut and slowing growth in China. Prices were capped as Iran made progress on an
accord to lift sanctions on its exports while a measure of manufacturing in China, the
world’s second- biggest oil user, slumped to the lowest in more than six years (see graph)

•PGK/USD closed for the week 1.0% lower at 0.3485, while PGK/AUD rose 1.5% to close at
0.4969 for the week

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pdfKFM Weekly Investment Update: Friday, 25 September 2015