KFM Weekly Investment Update: Friday, 06 July 2018 - Kina Bank

KFM Weekly Investment Update: Friday, 06 July 2018

Local Market Summary:
● Prime Minister (PM), Hon Peter O’Neill, stated the importance of the 2018 APEC
Summit that this event would be a huge business opportunity for the country.
PM further highlighted the APEC CEOs’ meeting as a global event, and the
country is ready to host the world’s business leaders. Mr O’Neill made these
remarks during a special event co-hosted by the APEC Business Advisory
Council in Port Moresby this week
● Paradise Company (PCL) acquired Laga Industries from Steamships. According
to PCL’s chairman Mr Anthony Smare, the move was driven by the prospective
for growth of the two businesses combining strengths. Mr Smare said that PCL
was growing strongly over the last two years and a successful investment for its
shareholders Nambawan Super and Comrade Trustees Services. The chairman
further stated that this acquisition was a statement of ambition by PCL and its
shareholders as the company brought together two strong growing food
businesses to create a large food business with strong sales and distribution
network around the country
● According to Chairman of Securities Commission of Papua New Guinea
(SECOM) Mr Christopher Hnanguie, the SECOM would conclude drafts
regulations and codes for the capital market by the end of this month. Mr
Hnanguie said that the SECOM initiated the drafting of Capital markets
regulations; corporate governance code; compulsory mergers and acquisitions
code; licensing guidelines for trustee fund managers; and financial
intermediaries. Chairman Mr Hnanguie further said that SECOM would use the
draft to consult with stakeholders before finalising and submitting to the office of
Legislative Counsel and National Executive Council for endorsement which the
draft was expected to be gazetted by September
● Port Moresby Stock Exchange advised the public that the voluntary suspension
of securities for PNG Air (CGA) has been uplifted. The uplift of suspension was
a directive from the SECOM relating to the company’s announcement of a
material transaction in negotiation that SECOM released in February 2018 a
guidance note which conflicted with the nature of the announcement and
therefore the suspension was lifted on Tuesday 03 July 2018 and normal trading
● City Pharmacy (CPL) shareholders at the recent Annual General Meeting
elected 3 new directors, Ms Mary Handen, Mr Stanley Thomas and Ms Mary
Ellen Johns to join the re-elected directors Mr Peter Robinson and Mr John
Dunlop as the directors of the company. Furthermore, Shareholders authorised
the Board of Directors to appoint Deloitte Touch as the company Auditor
● The Bank of Papua New Guinea (BPNG) has advised the general public that
the Kina Facility Rate for the month of July is maintained at 6.25% from the
previous month
● This week’s BPNG auctions in Central Bank Bills were over-subscribed by
K163.00m out of the total amount offered K397.50m. The weighted average
yield for 28 days decrease by 0.72% to 1.39% from 1.40% from the previous
● This week’s BPNG auctions in Treasury Bills were under-subscribed by
K42.78m out of the total amount offered K277.63m. The weighted average
yields for 182 days increase by 0.21% to 4.73% from 4.72% while 273 days and
364 days remain unchanged from the previous week at 6.76% and 8.05%
● Both the KSi Index and KSi Home Index increased by 1.0% and 0.4% to end
the week at 5,262.02 and 11,287.40 respectively. This was mainly attributed to
the rise in share price of banking and oil industry stock Bank South Pacific and
Oil Search. Both stock closed the week at K10.05 and K19.50
International Market Summary:
● The US Federal Reserve published their minutes this week indicating
confidence in strong US labour market. After raising interest rates again last
month, the US Fed has projected another two rate hikes for the remainder of
the year on the back of improving economic conditions in the US
● Asian stocks swayed on Friday, as Washington cuffed tariffs on Chinese
imports, many investors fear that this could be the start of a full-scale trade war
between the world’s two largest economies. Meanwhile, Japan’s Nikkei cyclical
shares like automakers rebound for the first time this week on Friday as
investors took heart from reports that the US and the European Union could
agree to suspend auto tariffs
● All main indexes in the US closed higher on growing confidence in the US payroll
data to be release this week. The Dow Jones Industrial Average closed higher
at 0.4% to 24,356.74, S&P500 at 0.7% to 2,736.61 and the Nasdaq Composite
at 1.0% to 7,586.43 points for the week
● The Australian market has hit a new decade high as Asian markets delivered a
muted response to the start of US President Donald Trump’s tariffs on $US34
billion worth of Chinese imports. S&P/ASX 200 and S&P/ASX 50 both closed
higher by 1.3% and 1.4% to end at 6,727.30 and 6,132.80 points respectively
● Oil prices slid for the week on increased inventory data released by the Energy
Information Administration. WTI Light crude oil price is down 1.4% to US$73
and the Brent crude oil price is down 2.7% for the week to US$77 per barrel
 KFM Weekly Investment Update: Friday, 06 of July 2018