KFM Weekly Investment Update: Friday, 17 November 2017

Local Market Summary:

• PNG was officially declared as an Asian Pacific Economy Co-operation (APEC) hosting country after PM Hon. Peter O’Neill met with all the 21 APEC leaders in Da Nang, Vietnam for the 2017 summit. The leaders determined to inject new dynamism into APEC’s country. Leaders pursued to formulate a shared vision for advancing APEC’s role as the driver of economic growth and integration and this agenda will be discussed in PNG when the country host summit

• Deputy PM and Treasurer Hon. Charles Abel said that the 2018 national budget is expected to be tabled in Parliament on the 28 of November. Parliament in its last sitting in September passed a supplementary budget which among other things to reduce the debt-to GDP ratio to around 30.0% levels. This was due to the fall in government’s revenue which forced the government to reduce costs so as to maintain the 2.5% deficit forecast in the 2017 national budget

• The coffee industry corporation’s production partnership in agriculture project set up a laboratory to test the quality of coffee in Goroka. This would help the growers to get a fair price for their coffee based on cup quality and would support the new coffee standard to be gazetted based on the quality rather than physical attributes. The availability of cupping facility will help grading system for green bean

• The K33.0m Cassowary Hotel in Kiunga, Western Province is expected to be opened in February, 2018. OK Tedi Development Foundation said that the hotel would be generating an annual return in excess of K2.0m over 20 years for eight Community Mine Continuation Agreement Trusts. The 40-room hotel would be managed by Coral Sea Hotels group

• Kumul Petroleum Holdings invested K12.5m (US$4.0m) in the quality training facility to become the first institution in the southern hemisphere to have a live simultaneous processing plant in Port Moresby. This facility would ensure that PNG will have its own skilled workforce

• Newcrest mining (NCM) announced the statutory profit of K988.0m (US$308.0m) and an underlying profit of K1.3b (US$394.0m) from gold production at the annual general meeting held in Melbourne, Australia. NCM’s chairman Peter Hay said that the company generated free positive cash flow of K2.4b (US$739.0m) during the year. Mr Hay further said that NCM aimed to use its free cash flow generated from the business to reduce net debt and strengthen the balance sheet

• PNG Air announced that its annual general meeting of shareholders would be held on Wednesday 20 December 2017 at 10:30 am at Lamana Hotel, National Capital District, PNG

• This week’s BPNG auctions in Central Bank Bills were offered for 28 days and 63 days with an under-subscription of K21.5m out of total amount of K439.5m on offer. The weighted average yield for 28 days remained unchanged at 1.40% from the previous week while 63 days was 2.35%

• This week’s BPNG auctions in Treasury Bills were over-subscribed by K64.3m out of a total amount of K282.8m on offer. Weighted average yields for 182 days was 4.73% while 273 and 364 days remained unchanged at 6.76% and 8.01% respectively from the previous week

• Both the KSi Index and KSi Home Index remained unchanged from the previous week at to end at 5,289.15 and 11,037.67 points respectively

International Market Summary:

• US passed the most comprehensive tax overhaul in three decades as lawmakers seek to enact $1.5t in tax cut which cause global stock indexes and the US dollar cooled off Friday. This signified that US tax reform could be delayed impeded the market’s momentum. The pause that the market is directly related to what’s going on from a tax standpoint

• Oil prices retreated for the first time in 6 weeks. Prices for light crude oil dropped 2.5% to US$55.31 per barrel as US production recovered with inventory and exports. Brent crude oil prices which saw a boost from the OPEC-led agreement to cut output dropped 3.7% to US$61.30 as uncertainty spreads around Russia’s support to extend the agreement come November

• Japan’s Nikkei share average rose to a more than two-week high backed by shares in most sectors while chip-related stocks such as Sumco and Tokyo Electron outperformed. Consumer electronics products makers also staged a

• PGK/USD remained unchanged for the week to close at 0.3115 while PGK/AUD appreciated by 1.5% to end at 0.4115

• The AUD/USD was down 1.5% to 0.7571 while EUR/USD and GBP/USD appreciated 1.4% to 1.1806. and 0.6% to 1.3233 respectively

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pdfKFM Weekly Investment Update: Friday, 17th of November 2017

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