KFM Weekly Investment Update: Friday, 23 June 2017 - Kina Bank

KFM Weekly Investment Update: Friday, 23 June 2017

Local Market Summary:
•Community Development Model (CDM) project a jointly funded project
between the Government of PNG and the World Bank, has been hailed a
great success. CDM project coordinator and community development officer
of Tapini LLG in Goilala district Ms Leontine Javia said with just K2.0m spent
over three years, a total of 74 funded projects mostly driven by women are
successfully operating in rural PNG. 43 in Central and 31 in Western
•Oil Search announced that it has signed documentation with a 14 member
bank group for a new five year, non-amortising, revolving credit facility of
US$600.0m. This new facility is in addition to the two existing bilateral
facilities totalling US$250.0m taking the Group’s total available facilities to
US$850.0m, all of which remain undrawn
•ExxonMobil Corporation announced positive production well test results from
the Muruk 1 sidetrack 3. President of ExxonMobil Exploration Company Mr
Steven Greenlee said the company was encouraged by those well test
results and would integrate them into the ongoing resources evaluation work
and potential appraisal program in 2018
•Papua New Guinea’s only oil and gas company Kumul Petroleum Holdings
Limited (KPHL) has grown from strength to strength and now has a net asset
position of US$1.76b (K5.83b). According to KPHL managing director Wapu
Sonk, its biggest asset is the PNG LNG project’s 16.6 percent interest. Apart
from that, the portfolio also comprises stakes in the Hides Gas to Electricity
project, the South East Gobe field (which is not part of the PNG LNG project,
and its 10.0% shareholding in Oil Search Limited.
•PNG Air CEO Muralee Siva stated that the company is in a strong position
after going through major changes over the past three years. He said the
main purpose of the changes was due to competition within the air industry.
He added that change that benefits all is driven by competition, and the firm’s
aim now is to attract and retain customers and focus on what they want
•City Pharmacy Limited (CPL) Group halted the trading of its shares on the
Port Moresby Stock Exchange (POMSoX) following the destruction of its
head office and warehouse in Port Moresby on the 18th June 2017. MD Joe
Barberis said that the company needed time to assess the damage to its
business operation.
•This week’s BPNG auctions in Central Bank Bills was under-subscribed by
K55.0m of the total amount of K608.5m offered. The 28 day bill was offered,
with a weighted average yield of 1.27% compared to the previous week’s
weighted average yield of 1.25%
•This week’s BPNG auctions in Treasury Bills was under-subscribed by
K79.9m out of a total amount of K233.3m on offer. Weighted average yields
for terms 91 days remained unchanged at 2.50% while,182, 273 and 364
days were 4.74% 6.67% and 7.93% respectively
•Government Inscribed Stock auction was over-subscribed by K30.3m on all
series out of the amount on offer K50.0m. The weighted average yields for
for 2020 and 2025 series were unchanged at 9.41% and 11.53% from the
previous month while the 2022 and 2028 series were 10.54% and
12.75%The KSi Index has decreased by 10.1% compare to the previous
week to end at 4,824.81 points. The KSi Home Index rose 0.1% to conclude
at 11,067.82 points, reflecting increase in share price of banking and
financial stock BSP and KSL
International Market Summary:
•Oil prices continued to decline 7.0% for the week and almost 20.0% over the
past month. The decline in oil even led to a slew of oil-stock downgrades
earlier this week. The commodity’s fall hasn’t been alone. Interestingly, it’s
fallen alongside coffee prices. Accordingly, Coffee prices continued to fall on
the back of strong exports in the first seven months of the coffee year which
resulted in excess supply in the market and inventories in consuming
countries are high
•The Dow Jones Industrial Average fell 12.74 points, or 0.06%, to 21,397.29,
the S&P 500 lost 1.11 points, or 0.05%, to 2,434.5 and the Nasdaq
Composite added 2.73 points, or 0.04%, to 6,236.69
•Nikkei was flat at 20,119.55 points in midmorning trade. The index is on track
to gain 0.9% for the week where it touched its highest levels since August
•PGK/USD remained unchanged for the week to close at 0.3145 while
PGK/AUD appreciated 0.3% to end at 0.4160 and AUD/USD drop to 0.30%
to end the week at 0.7561
Click the link below to view the full report in PDF.
KFM Weekly Investment Update: Friday, 23rd June 2017