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KFM Weekly Investment Update: Friday, 01st September 2017

Local Market Summary

•The Treasury department released the Government’s 100 Day Plan to implement the Alotau Accord 2 which was approved by the National Executive Council. Treasury minister, Hon Charles Abel, who is also the Deputy Prime Minister in his announcement said that the PNG economy is currently facing slowdown in growth as a consequence of a number of factors including subdued global growth, low export prices which affected Government revenue, the impact of El Nino especially on Ok Tedi Mine and rising Government expenditure.

•The Treasury Minister went on to say that whilst the medium term outlook is positive, the Government’s 100 Day plan puts emphasis on five main interventions which are; to maintain fiscal discipline and boost foreign exchange, growing revenue streams, strengthening economic base, improving governance record and acting strategically. With half the year passed and GDP growth projected to be 2.7% for the year, the Government’s efforts toward growth recovery remain to be seen for the remainder of the year

•The Financial Inclusion Innovation Summit (FIIS) hosted by the Bank of Papua New Guinea this week saw up to 200 participants from across the region at the Stanley Hotel in Port Moresby, marking its 10th Anniversary. Keynote speaker
and Secretary General of the Pacific Islands Forum Secretariat, Dame Meg Taylor challenged participants to further explore digital financial inclusion. She said despite the increase in use of mobile phones in the Pacific over the last 10 years, its use for financial inclusion has not progressed in the region compared to similar trends across Africa and Asia. Dame Taylor emphasized= the need for investment in reliable and consistent data on financial inclusion, adding that the absence of a database made it difficult to measure the progress of financial inclusion in the Pacific

•The innovative distributed ledger technology, better known as Blockchain, can provide opportunities for creating value while improving the challenge of financial inclusion in PNG according to ANZ’s head of trade and supply chain Michael Lim. During the recent Bank of PNG’s Blockchain summit Mr Lim said the technology has many benefits including reducing paper-based transactions and fraud, promoting transparency, driving standardization and increasing efficiency

•Mr. Lim added this could significantly reduce costs and risks through the use of this technology thereby enhancing the safety and efficiency of international trade and speed of payment. He said the technology could also be used in other industries in PNG but this requires broad industry adoption and collaboration between customers, competitors, regulators and technology companies

•Digicel CEO Oliver Coughlan announced that the mobile phone network provider will be swapping to the Huawei network in October this year. Mr Coughlan said this during the launch of Huawei’s latest phone editions which will require world class networks, he added that a partnership with Huawei would benefit customers offering them the most technologically advanced network

•Steamships Trading Company announced an unaudited profit after tax and minority interest of K45.4m for its half year results. This was an increase of K1.8m (4.2%) over the same period in 2016 while significant items underlying profit attributable to shareholders decreased to K10.1m (24m) for the same period

•This week’s BPNG auctions in Central Bank Bills were offered for 28 days only with over-subscription of K31.0m out of total amount of K344.5m on offer. The weighted average yield remained unchanged at 1.37% from the previous week

•This week’s BPNG auctions in Treasury Bills were under-subscribed by K17.74m out of a total amount of K91.4m on offer. Weighted average yields for 182 days and 273 days remained unchanged at 4.74%, 6.71% and 364 days for 7.99% respectively

•The KSi Index increase by 0.01% to end the week with 4,986.55 points while and KSi Home Index also increased by 0.9% to end the week at 11,104.29 points

International Market Summary

•Markets saw positive movements for the week as U.S. inflation rose at its slowest pace since late 2015, lifting expectations that the U.S. Federal Reserve will hold off from increasing interest rates again this year. Furthermore, U.S. consumer spending grew in July, along with wages and salaries indicating a growing momentum in the global economy. The NASDAQ ended 2.6% higher at 6, 428.66 points, the S&P 500 ended 1.2% higher at 2, 471.65 points while the Dow Jones ended 0.6% higher at 21, 948.10 points

•Asian stocks were higher taking cue from optimism in the U.S. Japan’s Nikkei was up 1.2% to end at 19, 691.47 points, Shanghai’s index ended 1.0% higher at 3, 366.40 points and Hong Kong’s Hang Seng ended 0.4% higher at 27, 946.14 points

•European stocks were mixed for the week with German DAX and CAC 40 index both down 0.9% and 0.4% respectively while the FTSE 100 index was up 0.4% as geopolitical tensions emerged after North Korean latest missile test earlier in the week

•The EUR/USD and GBP/USD were both up 0.8% as a result of a positive week for the US economy and subsequently the US dollar
 
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pdfKFM Weekly Investment Update: Friday, 01st September 2017

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