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KFM Weekly Investment Update: Friday, 10 November 2017

Local Market Summary:

•Small-to-medium enterprises (SMEs) accounts for more than 97.0% of
enterprises and employs half of the workforce in Asia-Pacific Economic
Cooperation (APEC) nations, according to a survey conducted by APEC.
Minister for Youth, Community Development and Religion Soroi Eoe told an
expo on women economic empowerment that SMEs contributed significantly
to economic growth with GDP ranging from 20.0% to 50.0% in most Asia-
Pacific Economic Cooperation economies

•Minister for Agriculture and Livestock Mr Benny Allan hailed Paradise Foods
Limited for its efforts in supporting agriculture development with the
establishment of the Queen Emma Chocolate Company. He said that was a
big boost for the cocoa industry and he advised that chocolate company is
providing opportunities for cocoa farmers throughout the country to sell their
cocoa locally also enabling the company to process PNG made chocolate.
Paradise Company Limited CEO, Michael Shields thanked the ministers for
their visit and acknowledged that his company will continue to work with
cocoa and spice farmers to provide income-earning opportunities.

•Prices for diesel and kerosene have risen while price for petrol dropped in
Port Moresby. The price of petrol dropped by 0.13 toea to K3.29 compared
with the previous month. Diesel increased by 6 toea to K2.74 and price for
kerosene also went up by 0.85 toea to K2.59 compared with the previous
month. Independent Consumer and Competition Commission noted that the
increases for diesel and kerosene and decrease for petrol were attributed to
the fluctuations in import parity prices for these refined petroleum products

•Kina Securities Limited made an amendment to the renewed escrow
arrangements relating to 32,758,650 ordinary shares in the company held by
Fu Shan Investment Limited (Escrowed Shares) until 27th April 2018. This
is to accommodate the regulatory requirements of Bank of Papua New
Guinea (BPNG). The escrowed shares currently represent approximately
20.0% of Kina’s issued capital. Escrow terms include capacity to deal in the
escrowed shares with the prior consent of BPNG.

•China Railway Construction Engineering Group Real Estate is embarking on
a new project that will result in PNG having its first vertical green city that will
be located at Town Central Business District right of Internal Revenue
Commission building. This project is set at K250.0m an investment that will
boost the capital city’s economy

•Prices for commercial properties are expected to drop due to an oversupply
in the market, president of Real Estate Industry Association Mike Quinn said.
We appear to be heading towards a significant oversupply of commercial
retail and office space in Port Moresby which without any significant stimulus
Occurring is likely to drive prices and values down in 2018 for property, Quinn
said. This is not likely to recover until 2019 at the earliest

•This week’s BPNG auctions in Central Bank Bills were offered for 28 days
only with an under-subscription of K36.5m out of total amount of K611.5m
on offer. The weighted average yield remained unchanged by 1.40% from
the previous week

•This week’s BPNG auctions in Treasury Bills were under-subscribed
by K42.0m out of a total amount of K261.4m on offer. Weighted average
yields for 273 and 364 days remained unchanged at 6.76% and 8.01%, while
182 days was decreased by 0.01% to 4.73% from 4.74% from the previous

•The KSi Index increased from the previous week at 0.1% to end at 5,289.15
buoyed by the rise in share prices of OSH to end at K17.82. The KSi Home
Index raised by 0.4% to close at 11,037.67 points

International Market Summary:

•The Nasdaq Composite Index fell the most since late October as did the Dow
Jones Industrial Average and the S&P 500 SPX. Those moves came as the
CBOE Volatility Index a measure of implied volatility jumped 7.7% to trade
at 10.53, still far below it’s historically average at around 19

•The Nikkei Stock Average was down 1.4%, following the market’s recent
strong run that saw the index close at a 25-year high. Stocks in Tokyo were
also hit by further gains in the yen with the US dollar trading at around
¥113.31 compared with ¥113.59 at Thursday’s stock-market close

•The EUR/USD is down 0.2% to 1.1647 and GBP/USD up by 0.6% to 1.3148
for the week

•Both PGK/USD and PGK/AUD remained unchanged for the week to close at
0.3115 and 0.4053 respectively.

•AUD/USD also remained unchanged for the week to close at 0.7686`

Click the link below to view the full report in PDF.

pdfKFM Weekly Investment Update: Friday, 10 of November 2017

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