KFM Weekly Investment Update: Friday, 17 February 2017

Local Market Summary
• According to the Chief Secretary of Asia-Pacific Economic Cooperation (APEC), Isaac Lupari, the APEC meeting next year will bring economic benefit to the country. During the signing of a memorandum of understanding between the APEC Team and the National Research Institute, Lupari said many people around the country were often critical of the APEC meeting. Mr Lupari believed the event would showcase to the world who we are, our culture, our country and our people
• Independent Consumer and Competition Commission (ICCC) were approach by Kumul Telikom to discuss the proposed merger with DataCo and Bmobile. The meeting between Kumul Telikom Chairman Mahesh Patel and CEO of ICCC held this week was in response to media reports announcing that cabinet approved the transfer of the shares of DataCo and Bmobile to Telikom. ICCC was happy with the approached taken and will be happy to do a proper competition assessment to ensure the merging does not create an ineffective market competition
• Mineral Resources Authority (MRA) recorded over K9.7b in mining revenue for year 2016. Based on MRA production reports by mines, Lihir Mine generated the most with K3.57b, Ok Tedi at the second place with K2.1b and Porgera at third spot with K2b. Other contributors include: Ramu Nico (K705m); Hidden Valley (K603m); Simberi (K407m); Alluvial Export (K354m); Eddie Creek (K2m) and Crater (K1m). Factors that contributed to the increase include improved mineral commodity prices, rising production at key mines and benefits from plant upgrades with more efficiencies and new management strategies
• ExxonMobil PNG said that an additional of 2.3 trillion cubic feet (Tcf) was added to the existing PNG LNG project fields resource base. The rectification study which included all PNG LNG fields discovered that the most technically recoverable resource was 11.5 Tcf which is a 25.0% increase than the 9.2 Tcf assessment. MD Mr Andrew Barry said that ExxonMobil would continue to work with the Government, its co-ventures, provincial governors, landowners and communities to maximize the PNG LNG resource value and provide long-term sustainable benefits to Papua New Guineans
• InterOil Corporation announced through POMSoX that its shareholders approved the company’s takeover by Exxon Mobil Corporation. More than 91.0% votes casted supported the proposed transaction at the Special Meeting held during the week. The firm also revealed that the court hearing about its final order with respect to the Amended and Restated Plan of Arrangement is scheduled for February 20, 2017
• Newcrest Mining (NCM) reported a half year profit of $187.0m and an underlying profit of $273.0m with gold production of 1.23m ounces. MD and CEO Mr Sandeep Biswas said he was pleased with the operational performance in this half. Lihir Mining achieved its target mill throughput rate of 13mtpa (annualised) and Cadia achieved significant milestones in cave development and interaction
• Furthermore, NCM announced that the Board will be paying an unfranked interim dividend of US$0.075 per share. Ex-date 22 March 2017, record date 23 March 2017 and payment date 28 April 2017. The dividend will be paid from conduit foreign income and will not be subject to dividend withholding tax when paid to non-Australian resident shareholders. In addition the dividend reinvestment plan will apply and allows for eligible shareholders to reinvest part of their dividends into Newcrest shares
• This week’s BPNG auctions in Central Bank Bills were offered for 28 days only with an over-subscription of K10.0m out of a total of K208.0m on offer. The weighted average yield was 1.13%
• This week’s BPNG auctions in Treasury Bills were over-subscribed by K24.8m out of the K176.37m on offer. Weighted average yields were 4.72% for 182 days and 7.79% for 364 days
• The Kina Securities Index remained unchanged to close at 4,814.66 points, while the Kina Securities Home Index was up by 0.4% to close at 10,724.33 points underpinned by the increase in share price of banking and financial stock Bank South Pacific up 0.4% to end at K9.05
International Market Summary
• Wall Street’s main stock indexes rose to fresh all-time closing highs on Friday as a spike in oil prices supported energy shares and investors renewed their optimism about President Donald Trump’s economic agenda. The Dow Jones Industrial Average rose 96.97 points, or 0.48%, to end at 20,269.37, the S&P 500 gained 8.23 points, or 0.36% to 2,316.10 and the Nasdaq Composite added 18.95 points, or 0.33% to 5,734.13
• Japan’s Nikkei share average dropped with the market wary of a stronger yen and financials weakened as US bond yields fell after comments by a senior US Federal Reserve official were viewed as relatively dovish. The Nikkei fell 0.60% to 19,238.73, for the week, the benchmark index has fallen 0.70% so far
• Asian stock markets took a break on Friday from their recent flow as investors booked profits, while the dollar inched up after Thursday’s slide and optimism over possible renewed supply cuts by OPEC lifted oil prices
• European shares steadied after rising for the past seven sessions, with gains in airlines stocks offset by weaker miners and a slump in British engineering group Cobham following a poor update. The pan-European STOXX 600 index was little changed in percentage terms at 371.34 points after recent strong gains to a two-month high in the previous session. European miners fell 0.90%, the biggest sectoral decliners, tracking weaker metals prices
• The Australian dollar is lower against its US counterpart which reached a three week peak against a basket of currencies. The Aussie dollar strengthened after a positive
• PGK/USD remained unchanged for the week to close at 0.3150, PGK/AUD depreciated by 0.9% to end at 0.4088, while AUD/USD appreciated by 0.9% to end the week at 0.7706
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KFM Weekly Investment Update: Friday, 17 February 2017