KFM Weekly Investment Update: Friday, 08 June 2018 - Kina Bank

KFM Weekly Investment Update: Friday, 08 June 2018

Local Market Summary:
Prime Minister (PM) Hon. Peter O’Neil officially opened the 189km transmission lines from Mt Hagen to Tari, including four sub-stations that will greatly benefit the people of the Highlands Region. The total project cost was K463.0m funded by Exim Bank of China through a loan agreement with the Government and implemented by TBEA, the major electricity company of China and Kumul Consolidated Holdings (PNG Power)
According to Deputy PM and Treasurer Hon. Charles Abel, Bank of PNG are currently conducting audit of foreign currency accounts held by several major resource companies such as Kumul Petroleum, Oil Search in conjunction with the commercial banks to identify taxpayers. This is to ensure compliance with procedures set by the Central Bank for remittance of proceeds in foreign currency back into PNG are met
In addition, the Department of Treasury is developing a fiscal template to establish a review of tax framework that will not impose extra burden on resource projects, but provide a smooth and consistent revenue to the Government that is easier to administer
Chairman of Teaching Service Commission, Mr Baran Sori stated that 56,000 teachers in the country will receive a 3% salary increment by June fortnight ending and backdated to January of 2017 as approved by the National Executive Council. Public Service Minister, Mr Elias Kapavore revealed that Teachers are the largest group out of the 120,000 public servants which the Cabinet had directed the Department of Treasury to ensure funding is secured
Fuel prices across the board have jumped again this month according to the Independent Consumer and Competition Commission (ICCC). The maximum retail fuel price for each fuel product in the country have increased on average with an upswing in petrol price by 26.64 toea per litre, diesel by 30.77 toea and kerosene by 26.43 toea. Subsequently, the retail (fuel distributors) prices in all other designated centres will also change accordingly  ANZ announced the launched of its Pacific-wide mobile banking application, giving customers using android phones, iPhones and iPads flexibility in managing their money. ANZ PNG’s Chief Executive Officer, Mr Mark Baker said that the app is cost-effective and will allow customers to do their daily banking more efficiently and conveniently. He added that the application contains enhanced security features embedded that should allow customers to do their banking safely and securely
KAML announced its 2017 final dividend payment details which shares will trade ex-dividend from 20 June, with a record date of 28 June for payment on 12 July. The company also revealed that future dividends will no longer be paid by cheque but by direct credit into shareholders bank accounts. Payment for 2017 final dividend will be the last to be issued via cheque. Hence the company appeals to all shareholders to contact PNG Registries immediately to update their details or alternatively download the direct credit form which is available on the KAML website www.kaml.com.pg.
This week’s BPNG auctions in Central Bank Bills were over-subscribed by K4.00m out of the total amount offered K393.5m. The only term on offer was the 28 day term which the weighted average yield remained unchanged from the previous week’s auction at 1.40%
Meanwhile, this week’s BPNG auctions in Treasury Bills were under-subscribed by K120.5m out of the total amount offered K199.79m. The 182 days, 273 days and 364 days terms were on offer which the respective weighted average yields also remained unchanged at 4.72%, 6.76% and 8.04% from the previous week’s auction
The KSi Index and KSi Home Index remained unchanged over the week each closing at 5,222.69 and 11,240.56 respectively
International Market Summary:
● Global markets were in turmoil again with ongoing concerns regarding the European Central Bank’s (ECB) pending decision on their quantitative easing (QE) program and increasing tensions between the US and its major trade partners after President Trump imposed import tariffs earlier ahead of the upcoming G7 Summit. Constituents of the G7 include key US partners such as Canada, Japan and the European Union
● Asian stocks slipped as global markets moved on concerns regarding the ECB looks to wind down their QE program. The ECB will meet in the next week to decide on possibly ending their bond purchase program this year. Nikkei and Hang Seng rose 2.40% and 1.60% to end at 22,694.50 and 30,969.99 points each while Shanghai Composite dropped to 3,061.08 points or 0.50%
● The US dollar was affected when US Treasury yields dropped after a short recovery during the week and the Euro rallied on news of the ECB possible ending their QE program this year. AUD/USD appreciated 0.90% over the week to close at 0.7607 and PGK/USD unmoved at 0.3065
● Oil prices were flat for the week mainly due to key producer Venezuela’s struggle in meeting supply commitments amid ongoing production cuts led by OPEC and Russia. Brent crude closed positive by 0.20% finishing off the week at 76.95
● Bond yields dropped on Thursday as market concerns regarding tensions between the US and its major trade partners
KFM Weekly Investment Update: Friday, 08 of June 2018