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.

pdf KFM Weekly Investment Update: Friday, 01 of March 2019