KFM Weekly Investment Update: Friday, 19 May 2017 - Kina Bank

KFM Weekly Investment Update: Friday, 19 May 2017

Local Market Summary
• PNG Government is in partnership with major businesses in agricultural production, particularly rice and commodities (coffee, copra and palm oil) to lessen imports into the country, Prime Minister Peter O’Neill said. He told the Australia-PNG Business Forum and Trade Expo in Port Moresby that this is as part of the Government’s aim to support delivery of important resource projects within the country
• Hon Prime Minister Peter O’ Neil further stated at the Australia-PNG Business Forum and Trade Expo that the Government is also reviewing agreements with fishing companies in the country to ensure fish caught in PNG waters are processed locally for value-added opportunity to earn more
• National Executive Council confirmed the appointment of Stanley Alphonse as the managing director of the PNG Ports Corporation Limited. Prior to his current appointment as the Managing Director, Mr Alphonse was the Chief Executive Officer since April 2012. The company’s Board chairman Mr Nathaniel Poya said that the board had confidence in Mr Alphonse’s leadership as leads the management of PNG Ports along its strategic path towards expansion of the ports infrastructure and oversee the implementation of major transformational projects for the company
• International Financial Corporation senior operations officer Mr Jonathan Kirkby noted that the regulatory reforms on how Government agencies deal with businesses will be more conducive for operation, according to a survey by World Bank on PNG’s ranking in the World Bank Ease of Doing Business. Mr Kirkby said the survey was conducted to look at the impact of business regulations on businesses around the world which PNG was ranked 119 out of 190 countries in the world
• Chief Executive Officer (CEO), Mr Ilan Weis said about K120m will be progressively invested in the establishment of a dairy industry in the country by the Innovative Agro Industries Limited as a cost-effective alternative to the products in the market. CEO Weis said that this will not only create a dairy farm but a new dairy industry in PNG. He added that the products will be on the shelves of supermarkets by September or October this year
• ExxonMobil Corporation has announced positive results on the Muruk-1 sidetrack well 21 kilometres northwest of the Hides gas field in Hela. Muruk-1 sidetrack well encountered high-quality sandstone pools southwest of the Muruk-1 natural gas discovery. This important discovery confirms the extent of the Muruk area and further establishes Muruk as a potentially significant new discover with the same high-quality sandstone pools as the Hides field that underpins the PNG LNG project, Steve Greenlee president of ExxonMobil Exploration Company said
• This week’s BPNG Central Bank Bills auction for the total amount K330.0m was offered for the 28 days term which resulted in an under-subscription of K4.0m out of a total of the total offer amount K330.0m. The weighted average yield for the term remained at 1.22% from the prior week
• This week’s BPNG Treasury Bills auction for the total amount K231.0m were over-subscribed across all terms on offer i.e. 182 days by K40.4m, 273 days by K15.8m and 364 days by K21.5m (total of K77.6m out of a total of the total offer mount K231.0m). The respective weighted average yields were 4.73% for 182 days, 6.59% for 273 days and 7.86 for 364 days
• Government Inscribed Stock auction was over-subscribed by K37.0m on all series out of the amount on offer K100.0m. The weighted average yields for the respective series were 9.41% for 2020; 10.51% for 2022; 11.53% for 2025 and 12.65% 2028
• The KSi Index ended the week higher at 5,151.14 points by 1.0% from 5,131.78 points the prior week following an increase in the NCM share price by 50.0%. Similarly, the KSi Home Index also rose higher by 0.1% closing the week at 11,101.82 points from the prior week which closed 11,093.62 points due to the positive movement of BSP share price by 0.2%
International Market Summary
• International markets were troubled this week as investors were increasingly concerned about the Trump administration’s ability to deliver its policy goals given mounting political pressures
• European stocks closed lower on Thursday largely due to the above apart from losses in financial and auto stocks. The CAC 40 was lower by 2.1% ending at 5,289.73 points while the DAX was down 1.4% ending at 12,590.06 points
• Asian stocks ended the week mixed as investors were still nervous largely due to political concerns mentioned above. Japan’s Nikkei was down 1.5% to end at 19,590.76 points while the Hang Seng and Shanghai Index both gained 0.2% for the week
• Australian shares softened as the financial sector was weighed down by concerns over proposed bank tax on banks and potential slowdown in the housing market. The S&P/ASX 200 index was largely weighed down by the “Big Four” ending the week lower by 1.9% at 5,727.40 points
• PGK/USD remained flat for the second consecutive week closing at 0.3145, PGK/AUD depreciated by 0.5% to close at 0.4236 from 0.4208 in the prior week. Meanwhile AUD/USD appreciated by 0.6% to end the week at 0.7426 from 0.7474

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KFM Weekly Investment Update: Friday, 19th May 2017