KFM Weekly Investment Update: Friday, 22 February 2019

• The PNG Government endorsed the 3rd CWC PNG Petroleum and Energy
  Summit, which will be held from 19 to 21 March 2019 in Port Moresby. The
  event will highlight updates and discussions on expanding opportunities in the
  country’s energy sector and the challenges faced. The summit’s history
  originated from the relationships CWC built with key stakeholders in PNG’s
  liquefied natural gas (LNG) industry. This year, the summit has drawn
  registrations from across Asia, including Australia, Japan, Malaysia and China.
• Minister for Petroleum Hon. Dr Fabian Pok announced that he will table a bill
  on the proposed National Petroleum Authority (NPA) in Parliament this year.
  President for PNG Chamber of Mines and Petroleum Mr Gerea Aopi said it had
  been many years since the Government agreed to launch an NPA, thus it was
  creditable that Mr Pok undertake to finalise the bill preparation and will play a
  vital role in regulating PNG’s oil and gas sector. Mr Aopi also revealed that
  petroleum development agreements for two multi-billion dollar LNG ventures –
  P’nyang gas project and Papua LNG – were expected to be signed in the
  coming month.
• According to Nasfund Contributors Savings and Loans Society (NCSL) General
  Manager Mr Vari Lahui, NCSL is anticipating to reach the K100.0m target in its
  loan portfolio before the year-end after NCSL achieved a large loan portfolio
  growth that allowed it to bring its loan delinquencies down to a very low level.
  Mr Lahui said growth of its loan book has become the main generator of NCSL’s
  revenue, unlike in the past where it had funds invested in the government bonds
  which generated most of the revenue. He further added that, 2018 interim yearend
  accounts showed NCSL recording the best financial results since its
  inception in 2003. The Board will declare additional interest payment to its
  members subject to the finalization of year end audited financials.
• PNG Air Limited (CGA) inconjuction with Virgin Australia have entered into a
  code-share agreement for flight services to between Papua New Guinea and
  Australia. Independent Consumer and Competition Commission Commissioner
  and Chief Executive Officer Mr Paulus Ain confirmed that the arrangement will
  allow a new marketing carrier to enter the market resulting with competitive
  airfares, direct connections and ease of luggage transfers for CGA’s domestic
  services.
• Despite the major PNG Highlands earthquake in 2018, Oil Search Limited
  (OSH) announced a robust full year net profit after tax (NPAT) of US$341.2m,
  a 13.0% increase compared to 2017. Stronger global oil and gas prices up
  27.0% and LNG price 31.0% higher attributed to the company’s returns which
  more than offset a 17.0% decline in production and sales volumes resulting
  from the temporary production shut down. OSH recorded a total revenue of
  US$1.5b and net debt of US$2.7b.
• Furthermore, OSH’s Board approved the payment of a final unfranked dividend
  of US$0.085 per share including the 2018 interim dividend of US$0.02 per
  share totaling the 2018 dividend to US$0.105 per share, compared to the 2017
  full year dividend of US$0.95 per share. The dividend will trade ex on 5 March
  2019 and be paid to shareholders on 28 March 2019.
• Kina Petroleum Limited (KPL) announced the appointment of Mr Geoff Walker
  as both the Secretary for Australian Matters and Chief Financial Officer,
  effective 4 March 2019. Mr Walker replaces Mr Alex Mitchell who resigns from
  KPL on 1 March 2019. Mr Walker has experience across a range of different
  industries including in the Australia Stock Exchange listed environments.
• This week’s BPNG auction in Central Bank Bills were over-subscribed by
  K17.0m out of the total amount offered K245.8m. This indicated that there was
  an increase in appetite for shorter dated securities. From the previous week,
  the weighted average yield for 28 days remained unchanged at 1.39% while
  the 63 days dropped by 0.01% to 2.34%. There were no offers for 63, 91 and
  182 days.
• This week’s BPNG auction in Treasury Bills were over-subscribed by K42.8m
  out of the total amount offered K307.4m. This indicated the continuous increase
  and competitive appetite for longer dated securities over the last couple of
  months. From the previous week, the weighted average yields for 182 days and
  364 days decreased by 0.04% and 0.05% to 4.66% and 6.64% respectively,
  while the 273 days increased by 0.03% to 6.05%. There were no offers for 63
  and 91 days.
•  Both Kina Securities Index and Kina Securities Home Index remained
  unchanged from last week to close at 5,171.40 and 11,482.09 points
  respectively for this week.

KFM Weekly Investment Update: Friday, 22 of February 2019