KFM Weekly Investment Update: Friday, 24 February 2017

Local Market Summary
• According to Malaysian High Commissioner to PNG Mr Jilid Kuminding, PNG‘s emergence as a new economic powerhouse of the region was much welcomed and the trade relations between Malaysia and PNG have been growing from year to year. He said trade has increased by 11.2% compared with the pcp of US$380.6m (K1,177.0m) and the bilateral trade between Malaysia and PNG from January to November 2016 totalled US$420.5m (K1,299.0m). He further advised that Malaysia’s top exports to PNG were machinery, equipment and parts, beverages and tobacco, chemical and chemical products, petroleum products and crude petroleum
• A total of 537,520 members from Nasfund will be receiving a 7.25% bonus onto their superannuation balance. This was attributed to a very strong performance by the fund which recorded a net profit of K283.5m. Board Chairman Mr Hulala Tokome said the results were positive in another challenging year as the fund was able to mitigate the global economy’s slowdown and limited access to foreign currency by valuation gains in fixed income securities and equities
• The Board of Comrade Trustee Services has made changes to its senior management. The Board has appointed the current Executive Manager-Member Services and Talent Mr John Auna as the acting CEO who will replace Mr Richard Sinamoi
• InterOil Corporation (IOC) announced that the Supreme Court of Yukon has approved the arrangement between IOC and ExxonMobil Corporation. The arrangement was approved by more than 91.0% of the shareholders who voted at the Special Meeting on February 14, 2017 and has now received all necessary approvals. IOC and ExxonMobil expect the transaction to be completed this week
• The Government is confident that ExxonMobil will deliver a significant impact on resource development, third party access, pipeline, liquefaction plants, plus the shipping and regasification terminal. Petroleum and Energy Minister Hon. Nixon Duban said this while congratulating ExxonMobil for finally concluding the acquisition of IOC in a K7.9b (US$2.5b) deal. Hon. Duban said the Supreme Court of Yukon’s decision would now enable ExxonMobil to create value for the shareholders of both companies and the people of PNG by increasing its position in the liquefied natural gas business through a diverse asset base and strong dividend stream
• Kina Securities (KSL) recently announced a net profit of K41.0m for the full year 2016 and has also declared a final dividend of K0.10 per share, taking the full year dividend to K0.20 per share. The stock trades ex dividend on the 2nd March 2017 with payment expected on the 27th April 2017. KSL CEO Mr Syd Yates commented that despite the increasing challenges around this has been a milestone and KSL will build a stronger and more efficient business while delivering on its vision to assist customers and improve their circumstances
• Oil Search (OSH) declared a core profit of US$106.7m for the annual year 2016 and a dividend of US$0.025. OSH trades ex dividend on 7th March 2017, with payment expected on the 30th March 2017. Total oil and gas production in 2016 were 30.2m barrels of oil equivalent (mmboe). This was revealed by MD Mr Peter Botten when releasing the Company’s 2016 full year report. He said the results were mainly contributed by excellent performance from the PNG LNG project with productions at an average rate of 7.9m tonnes per annum
• This week’s BPNG auctions in Central Bank Bills were offered for 28 days only with an over-subscription of K6.5m out of a total of K622.5m on offer. The weighted average yield was 1.17%
• This week’s BPNG auctions in Treasury Bills were under-subscribed by K100.1m out of the K341.8m on offer. Weighted average yields were 4.72% for 182 days and 7.79% for 364 days
• Government Inscribed Stock auction was over-subscribed by K18.67m out of the K110.0m on offer. The Weighted average yields for the series 2020; 2021; 2025 and 2028 were 9.08%, 10.57%, 11.48% and 12.67% respectively
• The Kina Securities Index was up 0.1% to close at 4,822.14 points, while the Kina Securities Home Index declined by 0.3% to close at 10,694.78 points underpinned by the drop in share price of banking and financial stock Bank South Pacific down 0.3% to end at K9.02
International Market Summary
• In US the Dow Industrials notched a 10th straight record in an up-and-down session as the DJIA closed up by 0.9% at a record of 20,810.32 points.
• European stocks were higher by Thursday’s close supported by a rally in corporate stocks, Barclays and Dialog. The DAX and CAC 40 were both up 1.6% (11,947.83 points) and 0.5% (4,891.29 points), respectively
• Asian shares were down, from 1-1/2-year highs associated with declines in materials share prices due to sudden falls in copper and other commodity prices while investors also assessed Washington’s stance on tax and currency policies.
• The Australian stock market extended losses on Friday from the previous session, following cues from overnight trading on Wall Street and lower commodity prices. S&P/ASX 200 benchmark index dropped by 1.2% to 5,739.00 points.
• PGK/USD remained unchanged for the week to close at 0.3150, PGK/AUD depreciated by 1.0% to end at 0.4083, while AUD/USD appreciated by 1.0% to end the week at 0.7716

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KFM Weekly Investment Update: Friday, 24 February 2017