KFM Weekly Investment Update: Friday, 26 May 2017 - Kina Bank

KFM Weekly Investment Update: Friday, 26 May 2017

Local Market Summary:
•The State has decided against implementing a recommendation from
the Taxation Review Committee to increase the Goods and Services
Tax from 10.0% to 15.0% on the grounds that it will adversely affect
low income earners. The State will instead focus on companies
registered with the Investment Promotion Authority which have been
evading tax
•A memorandum of understanding was signed between the National
Fisheries Authority (NFA) and Vietnam to facilitate more co-operation
in the fisheries sector. NFA Managing Director, Mr John Kasu
confirmed that this will allow both parties to work together to deal with
illegal, unreported and unregulated fishing
•Puma Energy PNG Country Manager, Jim Collings confirmed that
more than K1.5m worth of fuel will be supplied by Puma Energy to
support the Ywam medical ships operations. He further confirmed that
this is an ongoing arrangement with the total funding by Puma Energy
of K4.0m
•Chairman of Bank South Pacific (BSP), Sir Kostas Constantinou
announced a K0.79 final dividend for the year ending 2016. Sir Kostas
said that despite subdued economic conditions in PNG and other
Pacific countries where BSP operates, the group recorded a net profit
after tax of K643.5m, an increase of K111.6m from the previous
corresponding year. The dividend is payable on 23 June 2017
•Furthermore, BSP also announced the Group’s unaudited results for
Q1’2017, reporting a net profit after tax of K170.2m compared to the
previous corresponding period. The Banks balance sheet reflected a
generally stable market share in PNG and an expectation of
continued subdued business conditions in the short term. Capital
adequacy has improved to 25.1% at the end of the quarter
•This week’s BPNG auctions in Central Bank Bills for 28 days was
under-subscribed by K51.0m out of the total amount K659.5m offered.
The weighted average yield for the term remained unchanged at
1.22% from the prior week
•This week’s BPNG auctions in Treasury Bills was over-subscribed by
K2.86m out of a total amount K172.48m offered. Weighted average
yields for terms 182 days remained unchanged at 4.73% from the
previous week while 273 days and 364 days respectively at 6.64%
and 7.88%
•The Kina Securities Indices produced mixed results with the KSi Index
concluding the week unchanged at 5,097.55 points. On the other
hand the KSi Home Index declined by 0.1% driven by the decline in
the share price of CCP to end the week at 11,095.16 points
International Market Summary:
•European stocks uneven a slight loss on Thursday, disadvantaged by
lower volume and a slide in oil prices following news the Organization
of the Petroleum Exporting Countries will hold back from making
deeper production cuts
•US dollar was flat on Thursday, though it rose against the so-called
commodity currencies as crude oil prices fell following an agreement
by Organization of the Petroleum Exporting Countries and other major
producers to extend production cuts
•Commodity currencies were also under pressure in Asia following the
weakness in assets like oil, iron ore and steel. Against the US dollar,
the Australian dollar fell 0.4% against US dollar, while the New
Zealand dollar was down 0.2% against US dollar
•PGK/USD was unchanged for the third consecutive week closing at
0.3145, PGK/AUD declined by 0.1% to close at 0.4231 from 0.4236
in the previous week. Meanwhile AUD/USD rose by 0.1% to end the
week at 0.7433 from 0.7426
Click the link below to view the full report in PDF.
KFM Weekly Investment Update: Friday, 26th May 2017