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KFM Weekly Investment Update: Friday, 14 August 2015

Local Market Summary:

•The Government is reviewing public services processes in an effort to cut down on
expenditure and stop wastage, with the objective to save around K300.0m. Prime
Minister Hon. Peter O’Neill confirmed that key priority areas would not be affected

•OK TEDI Mining said that the suspension of its mining operations in the Western
Province of PNG began on Wednesday because of dry weather and low water levels.
The duration of this suspension is uncertain. The company will continue to actively
monitor the situation and determine the appropriate time to resume operations

•Nambawan Super (NSL) has recorded a profit of K168.0m for the first half of this
year. Board chairman Mr Anthony Smare said that the pre-tax profit was a 3.5%
return on the fund’s assets, excluding valuation adjustments for unlisted equity and
property, which highlighted an increase in the fund’s net asset value to nearly
K5.0bn. Mr Smare said that most of NSL’s earnings in the first half of the year were
derived from income from investments in Government Inscribed Stock

•Marengo Mining (MMC) announced its intention to delist from the Port Moresby
Stock Exchange (POMSoX). MMC said that its board of directors had determined that
it was in the best interests of the company and shareholders for it to delist from
POMSoX with reasons that included a move to access global equity markets. The
company’s announcement followed its recent delisting from Australian Stock Exchange
in June this year. Subject to POMSoX approval, Marengo expects trading to
be suspended on POMSoX on or around close of trading on Oct 19 this year, and
delisting to take place a week after

•Interoil has advised that Wahoo-1 sidetrack operations have not intersected a carbonate
reservoir and the company intends to plug and abandon the well. The Wildcat
Exploration well in PPL 474 was a significant step-out from the successful Elk-
Antelope gas hub in PRL 15, 170.0km to the north-west of PNG. Sidetrack operations
reached a final measured depth of 1,589m. InterOil CEO Dr Michael Hession said the
well has increased our knowledge in an under-explored area. Information obtained
from the well will assist in evaluating future targets in this frontier area

•CPL Group noted a decrease in profit in its half yearly report. The group reported
K3.04m compared to K3.3m in the previous corresponding period. The company
stated that this was due to additional expenses incurred in re-building phase which
the company stated would show improved performance for the year-end. The group
total revenue was 15.0% higher than last year by K218.4m compared to K189.6m.
Chairman Mr Mahesh Patel said: “All divisions have shown improvements, with the
outstation pharmacy upgrades continuing”

•Kina Asset Management announced a dividend of K1.09 for the month ending 31 July
2015

•Both KSi Index and KSi Home Index ended the week marginally lower by 0.6% and
0.4% to close at 3,474.2 and 9,514.1 respectively

International Market Summary:

•US stocks were little changed, as investors focused on US growth after two days of
concerns about China. The Dow Jones industrial average rose 0.2%, to 17,408.3, the
S&P500 gained 0.3% to 2,083.4 and the Nasdaq Composite dropped 0.2% to 5,033.6

•US oil prices fell to a new six-year low as a combination of worries about global economic
growth to a strengthening dollar, increasing crude supplies and a major U.S.
refinery outage weighed on the market. Global crude benchmark Brent fell 62 cents,
or 1.3%, at US$49.0 a barrel, ahead of Friday’s expiry of its front-month contract

•European markets steadied after the recent weakening of China’s currency slowed.
The FTSE100 in London lost 2.2% to 6568.3, the CAC 40 in France was down 3.3% at
4,986.9 and the DAX in Germany eased 4.1% lower for the week at 11,014.6

•Markets outside China eye down week on RMB change. Its decision on Tuesday to
modify the way it sets the reference rate for the Rmb has been the main event for
global markets this week. The currency had weakened by 3.0% against the US$ (by
Friday), as the central bank set the reference rate 0.05%stronger to Rmb6.3975

•Asian markets staged a relief rally, three days after China’s surprise devaluation of
the yuan. Japan’s Nikkei stock index was down about 1.0% for the week at 6,568.3
and the Hang Seng closed 2.2 lower for the week at 24,003.9

•Australian shares ended the week on a sour note, as another steep fall in oil prices
sunk energy names and the big banks suffered another wave of selling. The ASX200
dropped 31 points, or by 0.6%, to close at 5,356.5, while the All-Ords dropped 29
points to 5,360.0 & WTI hits new low since drop began 14 months ago (see graph)

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

pdfKFM Weekly Investment Update: Friday, 14 August 2015

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