KFM Weekly Investment Update: Friday, 18 January 2019 - Kina Bank

KFM Weekly Investment Update: Friday, 18 January 2019

Local Market Summary:
● The National Government has approved K10.0m National Shipping Services program to improve maritime passenger services. According to Department of Transport Secretary Mr Roy Mumu, this program will work in line with the government’s recent investment of K40.0m to redevelop ports in the country. The shipping services program will be rolled out in the maritime provinces
● Furthermore, Department of National Planning is prepared to release early financial support to the Bank of PNG (BPNG) to begin establishing the country’s very first Small Medium Enterprise (SME)-focused Credit Guarantee Corporation. Minister responsible, Hon. Richard Maru stated his correspondence with BPNG Governor Mr Loi Bakani, advising Mr Bakani of the need to integrate the company as the Credit Guarantee Corporation and establish a board and structure
● The Pacific Marine Industrial Zone (PMIZ) project in Madang and the Department of Commerce and Industry together confirmed 10 land titles for potential investors to commence the first stage of the PMIZ project. The project is on 215ha of land- 115ha for residential and commercial purposes and 100ha for canneries, respectively. The PMIZ will accommodate 10 tuna-processing plants and create 30,000 jobs that will not only benefit Madang but also the Highlands and other coastal provinces
● Bank South Pacific’s Chief Executive Officer Mr Robin Fleming, in an interview with Business Advantage PNG said, foreign currency (FX) availability is improving. Mr Fleming noted that most of the customers within small-to-medium range getting their FX orders filled within three weeks which was an improvement on where it was 12 months ago
● Paradise Company Limited’s (PCL) Chief Executive Officer Mr Michael Shields recently spoke at the launch of the new Queen Emma Chocolate range in Port Moresby, that Cocoa-based products are a vast opportunity for PCL and the country. PCL’s vision to become a world-class manufacturer drove the company to review its processes and invest time and resources to better understand its consumers and suppliers, which finally came to fruition as PCL now leads with downstream processing of cocoa. PCL is now the producer of cocoa products including other foods and beverage both domestically and internationally
● Port Moresby Stock Exchange (POMSoX) advised the stakeholders of PNG Air Limited that the securities of the Company will be suspended from official quotation from commencement of trading on 15 January 2019, following its failure to lodge its periodic report for the period ended 31 December 2017. The securities will remain suspended until further notice
● PNG’s only listed Investment Company, Kina Asset Management has released its Net Tangible Asset (NTA) of K1.26 per share as at 31 December 2018 via POMSoX. The share price traded at a discounted of K0.31 as per NTA to close at K0.95 per share
● The property market had always been a major investment option for super funds in the country of which Nambawan Super Limited (NSL) holds 11.6% of the fund’s entire investment portfolio since 2017. According to NSL, it will have a focused direction on maintaining the quality of the property portfolio in a bid to be lucrative in the property marketplace, since the country is welcoming vast improvements in the building sector in the capital of Port Moresby City
● This week’s BPNG auction in Central Bank Bills were over-subscribed by K21.0m out of the total amount offered K235.0m. This indicated that there was an increase in appetite for shorter dated securities. The weighted average yield for 28 days remained unchanged at 1.39% from the prior week. There were no bids for 63, 91 and 182 days.
● This week’s BPNG auction in Treasury Bills were over-subscribed by K251.9m out of the total amount offered K113.6m. This indicated that there was an increase in appetite for longer dated securities. The weighted average yield for 182 days, 273 days and 364 days was down 0.03, 0.07 & 0.13 points to 4.68%, 6.65% & 7.75% respectively from the previous week. There were no bids for 63, and 91 days.
● Kina Securities Index closed high by 1.0% to end at 5,146.73, while Kina Securities Home Index ended low by 0.1% to close at 11,409.38 due to drop in share price of BSP by 0.10% or K10.26 from K10.27 from the previous week.
International Market Summary:
● Global stocks rose with the exception of UK stocks, as US indices followed on from last week’s gains with optimism on Chinese stimulus measures and strong US corporate earnings in the banks lifting sentiment. UK investors remained cautious as Theresa May’s motion was voted down by a landslide defeat midweek, sending the index lower.
● US stocks closed in the green as the trade dispute between US and China called to ceasefire which boosted investor’s sentiments. Dow Jones by 1.6%, S&P 500 by 1.5% and Nasdaq by 1.6% to end at 24,370.10, 2,635.96 and 7,084.46 points respectively
● Asian stocks advanced as a report of progress in US-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment. Nikkei, Hang Seng and Shanghai all closed high by 1.5% to end at 20,666.07, 27,059.69 and 2,592.68 respectively
● Australian shares recovered to a two-month high driven by strong US leads and strength in the banks and energy sectors. Both the S&P 200 and S&P 50 closed higher by 1.8% and 1.6% at 5,879.59 and 5,789.20 points respectively
● Oil prices rose after a report from the Organization of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month, easing fears about prolonged oversupply. Both the Light Crude and Brent Crude ended by 2.4% to end at US$52.80 and US$61.94 respectively.
 KFM Weekly Investment Update: Friday, 10 of January 2020