KFM Weekly Investment Update: Friday, 29 August 2014

Local Market Summary

• A total of 12 shipments of LNG gas have already left the PNG shores raking in USD600.0m in revenue for all partners Prime Minister Hon Peter O’Neil said during parliament session. No revenue has been distributed to any partners until the lenders and insurance companies make completions clearance and guarantee that there is be 120 days of continuous flows of gas to the processing facility. He further noted that the government is expected to receive and estimated US$30.0b revenue over the next 20 years.

• The national government has invited investment partners into the petrochemical industry, Petroleum and Energy Minister Hon Nixon Duban said during a visit to Konedobu Petroleum Park outside Port Moresby. The minister said that petrochemicals was a growing industry in the region and urged investors to consider taking up opportunities in the country.

• The Singapore court judged ruled stopping PNG Sustainable Development Program (PNGSDP) from drawing money from the long term fund to pay for its operational expenditure. The court also directed PNGSDP to make available its accounts for the state to examine in two weeks. Prime Minister O’Neill further stated that the government plans to establish a new Western Province entity to undertake development program management as PNGSDP.

• Eda Ranu needs K1.2b to rehabilitate its infrastructure to meet the water supply demand of the rapid growing population in Port Moresby. CEO Mr Henry Mokono further stated that there has been talks with the Government through the Independent Public Business Corporation for a second water treatment plan costing K300.0m.

•??PNG’s resource sector has the potential to grow export revenue at least four fold to USD23.0bn per annum by 2030 ANZ group Chief Executive Mr Mike Smith said. Speaking at a Port Moresby Chamber of Commerce and Industry breakfast, Mr Smith further noted that natural resources export opportunity would require USD112.0bn in capital investments.

• Bank South Pacific posted a profit after tax of K265.5m in the first half of the year. Chairman Mr Kostas Constantinou said BSP had performed well and achieved a consolidated revenue growth of 15.0%. He further mentioned that due to the uncertainty surrounding the foreign exchange trading bands and its impact on the second half earnings. The board had declared a 20.0t dividend for the stock.

• Marengo Mining has announced the resignation of Mr Dean Richardson. Mr Richardson was the company’s vice president investor relations and corporate secretary.

• Steamships board of directors has approved the appointment of Mr Peter Langslow as the company’s managing director and CEO. Mr Langslow succeeds Mr Geoffrey Cundle and his appointment comes into effect as of 12/01/15.

• The KSi index and the KSi Home Index were both down 0.2% and 1.7% at 3,734.3 and 7,940.6 for the week

International Market Summary

• The US stocks declined during the week with the S&P 500 halting a three day winning streak to end below 2,000 following news that Russia moved well over 1,000 troops into Ukraine (refer to graph in the PDF attachment below).

• A series of new signs including a region wide dip in consumer confidence indicated that the Eurozone economy continues to struggle in a fitful recovery. Consumer prices fell in Spain while German unemployment rose and inflation across the Eurozone remained far below target at 0.8%. The latest data lent credence to European Central Bank (ECB) President Mario Draghi’s recent warning that more stimulus may be needed.

• US asset manager BlackRock has been signed by the ECB to advise on a bondbuying program the bank might undertake in its battle against deflation.

• Asian stocks fell, with the regional index set for its first monthly drop since April, the Nikkei lost 0.7% closing 15,424.6 points and Shanghai down 2.0% at 2,195.8.

• Gold held near a one-week high, on course to snap two weeks of losses, as escalating tension between Ukraine and Russia spurred haven demand. Gold was up 0.7% for the week to US$1,289.4. Light Crude and Brent Crude were also up for the week 1.2% and 0.4% respectively at US$94.8 and US$102.8.

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

pdfKFM Weekly Investment Update: Friday, 29 August 2014

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