KFM Weekly Investment Update: Friday, 09 June 2017 - Kina Bank

KFM Weekly Investment Update: Friday, 09 June 2017

Local Market Summary:
•Department of Agriculture and Livestock (DAL) transferred three portions of land to the Cocoa Board of PNG (CBPNG). This included the transfer of authority occupancy and lease titles. The portions of land are Section 39, allotments 5, 41 and 42 located at Kinabot, East New Britain (ENB). CBPNG’s CEO Mr Boto Gaupu was pleased and said the land will help the organisation realise its core functions. Mr Gaupu added that DAL will soon be transferring a number of other portions of land around the country to CBPNG
•The Independent Consumer and Competition Commission (ICCC) advised that all fuel prices have decreased which was attributed to the decline in Import Parity Prices (IPP). Petrol and Diesel dropped by 7toea per litre to K3.10 from K3.18 and K2.51 from K2.60 respectively. Kerosene also decreased by 6toea to K2.37 from K2.44
•On the contrary, ICCC is concerned about the arrangement between Telikom PNG and PNG DataCo to share infrastructure which may raise competition issues. Commissioner and CEO, Mr Ain said Telikom and DataCo are the only two companies in PNG who own fibre optic cables and are also competitors at the wholesale level for the supply of data. The commission was responding to the MOU signed by Telikom and DataCo to make available domestic and international cable capacity to each other on their infrastructure under a normal commercial arrangement
•Mining Minister Hon. Byron Chan announced that Ok Tedi Mining (OTML) made revenue of K56.0b from 1985 to 2016. He made the statement during the signing of the revised MOU in Tabubil. He said that the main sources of the revenue were derived from 12.0m ounces of gold, 4.5m tons of copper and 29.0m ounces of silver during that period. He added that OTML is a well-developed project in which all stakeholders involved were successful in their diverse business operations
•Tolukuma gold mine, under the management of the new operator Tolokuma Gold Mines (TGM) will commence production next month. TGM executive director Mr Vincent Siow said production will not be in full scale because equipment is a bit obsolete and they expect there will be some stress points. Mr Siow said they may have to buy new equipment after TGM identifies the stress points but in the main time they have everything all planned
•An increase in activity is expected for PNG’s residential property market heading into next year, according to Oxford Business. This is supported by positive prospects such as plans by oil giants ExxonMobil and Total to develop new or upgrade existing liquefied natural gas (LNG) projects. However, not all industry stake holders agree saying real estate market should not expect as big of a boom as with the first LNG project. It will just stabilise the market, but it will not over-inflate prices in the way that it did last time during the first PNG LNG Project commencement
•This week’s BPNG auctions in Central Bank Bills were offered for 28 & 63 days with an under-subscription of K32.0m of the total amount of K482.5m offered indicating a decrease in appetite for shorter dated securities. The weighted average yields were 1.25% and 2.35% respectively
•This week’s BPNG auctions in Treasury Bills were under-subscribed by K38.2m out of a total amount of K186.4m on offer signifying a decline in appetite for longer dated securities. Weighted average yields for terms 182 & 273 days were at 4.72% and 6.64% respectively while 364 days slightly increased to 7.91% from 7.89% from the previous week
•The KSi Index remained unchanged from the previous week to end at 4,879.36 points. The KSi Home Index dropped 0.2% to conclude at 11,048.12 points, reflecting the decline in share price of banking and financial stock BSP
International Market Summary:
•The Australian share market recovered from early falls as volatility swept global markets after exit polls pointed to a hung parliament in Britain. The S&P/ASX 200 closed for the week down by 1.9% at 5,677.80
•US stock futures slipped after UK’s exit polls suggested the governing Conservative Party failed to achieve an overall majority in Thursday’s election. Meanwhile the Frankfurt’s DAX dropped by 0.9% to end at 12,713.58
•European stocks closed lower on Thursday as investors assessed the European Central Bank’s policy stance while they waited for results from UK’s general election. Meanwhile the Frankfurt’s DAX dropped by 0.9% to end at 12,713.58
•PGK/USD remained flat for the week to close at 0.3145, PGK/AUD depreciated by 1.9% to end at 0.4175 while AUD/USD appreciated by 1.2% to end the week at 0.7534
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KFM Weekly Investment Update: Friday, 09th June 2017