KFM Weekly Investment Update: Friday, 01 March 2019

• PNG National Statistical Office released the quarterly Consumer Price Index
  (CPI) report for the 2018 December quarter. According to the report, CPI
  inflation was 0.8% for the quarter and 4.3% for the 12 months to December.
  The key contributions to the CPI inflation for the quarter were from the following
  CPI groups; Alcoholic Beverages (1.9%) driven by 2.7% increase in Betelnut
  prices, Miscellaneous (1.8%) driven by 4.0% increase in Toiletries products and
  Food and Beverages (1.2%) driven by increase in prices of fruits, vegetables,
  butter and seasoning products. The CPI inflation by town groups for the quarter
  were 1.1% for Port Moresby, 0.9% for Lae, 0.7% for both
  Goroka/Hagen/Madang and for Alotau/Kimbe/Rabaul.
• Lae Chamber of Commerce and Industry President Mr John Byrne, stated that
  the Foreign Investment Regulatory Bill is still under scrutiny and consultation
  within the business community. He added that other relevant business
  chambers believe the Bill will be re-tabled in the May Parliament Session and
  pursues a bill which protects and improves the rights of the country’s citizens to
  own and operate businesses, while equally protecting the law-abiding, taxpaying
  business community of investors and owners who employ, educate and
  develop tens of thousands of PNG citizens.
•  National Superannuation Fund (NASFUND) announced an interest of 3.5% to
  be credited to member accounts, following the release of its 2018 financial
  results of K158.0m profit after tax. Chairman Mr Hulala Tokome reported that
  the Board had applied prudency and caution in provisioning of a number of
  underperforming investments and which was reflected in the modest crediting
  rate.
• Kina Bank Limited’s subsidiary company Kina Nominees Limited (KNL), has
  had its Trustee License renewed under sections 37 and 189 of the Capital
  Market Acts 2017. Concurrent to the Securities Commission of Papua New
  Guinea, KNL is an experienced Trustee and Fund Manager with over K1.0b in
  funds under management and investment portfolios.
• Kina Securities Ltd (KSL) reported a statutory net profit after tax of K48.1m, up
  109% from prior corresponding period (pcp), FX income restored to K34.2m,
  Net interest margin steady at 7.6%, Net interest income of K87.6m, up 21%
  from pcp, Non-interest income of K74.1m, up 90% and Capital adequacy
  maintained at 28.9%. The financial results were predominantly driven by
  continuous foreign exchange trading, backed by a strong US dollar
  correspondent banking relationship further supported by higher income growth
  across the group.
• Additionally, KSL declared a final dividend of AUD 5.0 cents /PGK 12.1 toea
  per share. Dividend ex-date is 4 March 2019 and payable on 4 April 2019.
•  Bank South Pacific Limited (BSP) released the group’s consolidated operating
  profit after tax of K844.0m for the 2018 financial year. The revenue growth has
  come from interest income streams, particularly from loans and advances, with
  BSP growing its loan book by 11.8% as well as additional income from BSP
  Finance businesses in PNG, Fiji, Solomon Islands and Cambodia. BSP’s total
  assets at year-end was recorded at K20.7b.
• City Pharmacy Limited (CPL) Managing Director Mr Mahesh Patel said they
  anticipate to start rebuilding the Gerehu Warehouse which will cost around
  K45.0m in April. According to Mr Patel, the construction will be done in two
  phases, phase one will be a very large dry goods, air-condition, pharmaceutical
  and grocery and phase two will be the freezer and bakery and head office.
• This week’s BPNG auction in Central Bank Bills were under-subscribed by
  K1.9m out of the total offered K906.9m. The weighted average yields for both
  28 days and 63 days remained unchanged at 1.39% and 2.34% respectively
  from last week, while 91 days was at 2.51%. There were no offers for 182 days.
• This week’s BPNG auction in Treasury Bills were over-subscribed by K1.6m
  out of the total offered K208.9m. The weighted average yields for both 182 days
  and 364 days dropped by 0.03 points to 4.63% and 6.61% respectively from
  last week, while 273 days remained unchanged at 6.05%. There were no offers
  for 63 and 91 days.
• The Kina Securities Index remained unchanged from prior week closing at
  5,172.06 points, while Kina Securities Home Index rose by 0.2% to close at
  11,501.79 points this week. The increase was mainly attributed to the rise in
  share price of BSP stock from K10.30 to K10.32.

 KFM Weekly Investment Update: Friday, 01 of March 2019