KFM Weekly Investment Update: Friday, 05 October 2018 - Kina Bank

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
    91 days.
  • 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.

    KFM Weekly Investment Update: Friday, 5th of October 2018