KFM Weekly Investment Update: Friday, 16 February 2018 - Kina Bank

KFM Weekly Investment Update: Friday, 16 February 2018

Local Market Summary:
• Prime Minister (PM) Peter O’Neill responded to queries regarding the free
trade framework within the region, raised by members of the Melanesia
Spearhead Group (MSG) at the MSG meeting in Port Moresby. The trade
frame work will represent all MSG member nations however signing of the
agreement would need to be carefully considered as there are several issues
concerning the domestic trade that will require sorting.
• According to Chief Executive Officer (CEO) Greg Worthington of Trukai
Industries, the company has made significant progress and is on target to
deliver PNG’s largest rainfed rice crop in history. This was revealed when the
company launched its progressive report and five year plan on the production
of rice in the Markham valley of Morobe Province. CEO Greg said that in the
next five years Trukai would bring into production of 2000 hectares of rice
which is equivalent to 8000 tonnes of paddy grain.
• Kumul Petroleum (KPHL) and Mineral Resources Development Company
have signed a memorandum of understanding to build a power plant in Port
Moresby to increase electricity supply at the coast of USD70.0m (K220.8m).
Mr Sonk said that new power plant would supply 45 to 50 megawatts into the
Port Moresby grid.
• Credit Corporation PNG (CCP) Chairman Sir Wilson Kamit announced
CCPs’ 100.0% acquisition of Pacwealth Capital Pty Ltd and its subsidiary
company Pacwealth Capital. Pacwealth is one of the licensed investment
managers by Bank of PNG to provide investment and advisory services. the
board of directors of CCP believe that the acquisition is ideal for CCP and
are looking forward to continuing the growth of Pacwealth Capital in PNG.
• PNG’s only listed Investment Company Kina Asset Management announced
a Net Tangible Asset of K1.30 per share for the month of January, 2018.
Share price closed at K0.95 per share.
• Newcrest Mining (NCM) reported its’ half year statutory profit of USD98.0m
(K309.2m) and an underlining profit of USD116.0m (K365.9) with gold
production of 1.14m ounces. The company also announced a dividend
payment of USD0.075 (K0.24) per share which dividend goes ex on
21.03.18. Record date is on 22.03.18 and payment date on 02.05.18.
• This week’s BPNG auction result in Central Bank Bills offered for 28 days
and 63 days were under-subscribed by K90.50m out of the total amount of
K607.50m on offered. This indicates that there is a decrease in appetite for
shorter dated securities. The weighted average yield for 28 days remained
unchanged at 1.40% from the previous auction week while 63 days was at
• This week’s BPNG auction results in Treasury Bills were under-subscribed
by K26.86m out of a total amount of K275.40m on offered. This indicates that
there is a decrease in appetite for longer dated securities. Weighted average
yields for 182 days, 273 days and 364 days remained unchanged at 4.47,
6.76% and 8.04% respectively from the prior week.
• Both KSi Index and KSi Home Index decreased by 1.5% and 0.1% to close
at 5,606.82 and 10,907.52 respectively. These were mainly underpinned by
the decrease in share price of OSH and CCP.
International Market Summary:
• Global markets bounced back strongly after substantial declines over the
last two weeks as investors rush to buy back heavily sold stocks and as US
bond yields fell back from four-year highs. All three major US indices
recorded gains in each of the four sessions so far in the week. European
shares bounced off a six month low recorded late last week, following
strong US leads and a raft of solid company and economic updates.
• Australian shares failed to fully capture the global recovery with a soft
response to a number of earnings reports across the week.
• Japanese stocks rose on Friday, with investors relieved to see the
government appoint Bank of Japan Governor Haruhiko Kuroda for another
term and choose an advocate of bolder monetary easing as one of his
• PGK/USD remained unchanged for the week to close at 0.3095 while
PGK/AUD depreciated by 2.2% to end at 0.3868. This was driven mainly
by the cross-currency effect of the USD weakening against major
Click the link below to view the full report in PDF.
KFM Weekly Investment Update: Friday, 16 of February 2018