KFM Weekly Investment Update: Friday, 05 October 2018
- The PNG National Government has successfully raised US$500.0m in a 10
year inaugural sovereign bond issuance at 8.375%. Treasurer Charles Abel
said the bond issue will be used to offset expensive short term domestic debt
and convert them to long term and bring in the much needed foreign
exchange and fund the 2018 budget. He added that the government is
bringing back revenues that is in line with the Medium Term Revenue
- ANZ Bank has positively responded to the issuance of Sovereign Bond by
the PNG government. Managing Director of ANZ PNG Mark Baker said the
bonds have performed well with strong buy interest from investors. He added
that with acceptance of 10 year tenor for an inaugural issuance by a
sovereign rated B2/B is a positive sign from investors.
- The Commissioner and CEO of the Independent Consumer and Competition
Commission Mr Paulus Ain stated that the generation segment of the
electricity industry is now open for competition for entities who can build and
operate their own power stations. He revealed this while issuing the
generation license to Markham Valley Biomass Ltd, a subsidiary of Oil
Search Ltd which will start to supply electricity for consumers to use.
- The National No.1 Tea, a product of WR Carpenters has won gold in the
Australian International Tea Expo. WR Carpenter Estates manager John
Mangos said it is the first international recognition for PNG teas and the
award further justified the firm’s confidence in its products.
- In the meantime, the gas powered 57.78 megawatts power plant built by
NiuPower Ltd, a joint venture company owned by Oil Search Ltd and Kumul
Petroleum Holdings will be commissioned in November. KPHL MD Mr Wapu
Sonk said that the power plant launched in December last year is 80%
complete but was being delayed due to APEC. The power plant located at
the PNG LNG Project site will replace the 50 megawatts of diesel powered
generators in the city.
- Kumul Petroleum Holdings Ltd (KPHL) paid a dividend of K100.0m to the
State of PNG. KPHL Chairman Sir Moi Avei said the dividend was part of the
K300.0m that was earmarked for state this year. Deputy Prime Minister
Charles Abel while receiving the payment thanked KPHL for their support in
paying the dividend.
- Credit Corporation Ltd (CCP) has announced the appointment of Jeff Undah
as the new Chief Financial Officer replacing Avinesh Ram. CCP acting
chairman Johnson Kalo said Mr Undah has previously worked with Westpac
Bank (PNG) Ltd and Kina Securities Ltd in the financial sector and brings with
him a wealth of experience.
- RAMU NiCo Management (MCC) has released a statement announcing a
project expansion worth US1.5b (K5.0b) which will create more jobs. The firm
stated that the expansion will increase production levels and minimize
operational costs. Ramu Nico vice-president Wang Baowen explained that
the expansion will support cash flow and create opportunities for local
- This week’s BPNG auction in Central Bank Bills were over-subscribed by
K377.0m out of the total amount offered K259.0m. This indicated that there
was an increase in appetite for shorter dated securities. The weighted
average yield for 28 days remained unchanged at 1.40% from the previous
week. There were no bids for 63,91 days and 182 days.
- This week’s BPNG auction in Treasury Bills were under-subscribed by
K11.6m out of the total amount offered K184.4m. This indicated that there
was a decrease in appetite for longer dated securities. The weighted average
yields for 182, 273 and 364 days remained unchanged at 4.73%, 6.76% and
8.07% respectively from the previous week. There were no bids for 63 and
- The KSi index ended the week higher by 0.1% to end at 5,505.21. The Home
Index ended the week lower by 1.2% to closed at 11,353.06 points mainly
attributed to the dropped in share price of Bank South Pacific by 1.4% to
closed at K10.17.