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KFM Weekly Investment Update: Friday, 15 December 2017

Local Market Summary:

•The Government of Australia is providing $17.65m grant as additional
financing to help an ongoing health project supported by the Asian
Development Bank (ADB). This was announced by ADB PNG country
director David Hill at the ADB Year in Review 2017. He further stated that
the project is being rolled out in eight provinces and women and children
are the main beneficiaries.

•According to Finance Secretary Dr Ken Ngangan, the government accounts
for 2017 closed on the December 11 2017 and will re-open in January 16,
2018. All government cheques released will be cleared by 31 December
and failing this this would result in having these cheques cleared by the
issuing agencies next year

•PNG and India are set to enter into an Economic Partnership Agreement
(EPA) covering various sectors of mutual benefit. The agreement will be a
full arrangement that will guide our relationship covering investment and
trade, development assistance, people to people relations, business to
business connectivity, defence and security. Minister for National Planning,
Richard Maru said the decision made was the result of Indians recognition
that PNG has much business and other opportunities for Indian business
and the people of India

•Kina Bank Limited launched two banking apps to increase banking
efficiency for its customers. Kina Executive general manager banking
Danny Robinson said the two apps were for retail and corporate customers
and Corporate Internet banking. Customers can access their accounts
through their mobile phones. Corporate internet banking is for large
business customers and the rest of our customers is the retail application
for mobile banking

•Kina Securities Limited (KSL) announced that Mr Greg Pawson, successor
of outgoing Chief Executive Officer (CEO) Mr Syd Yates commenced office
on Monday this week. Mr Pawson has extensive banking and financial
experience having held senior management positions at Westpac, BT
Financial Group and Colonial. Mr Pawson also held a number of high-profile
positions including three years as President of the Australia PNG, Australia
Fiji and Australia Pacific Islands Business Councils

•The retail fuel price for patrol, diesel, and kerosene have increased through
PNG as of 8th December 2017. Independent Consumer and Competition
Commission (ICCC) stated that these price increases are due to the
increase in the Import Parity Price (PPP) for the month. ICCC confirmed
that retail fuel prices in the NCD will increase by 14.09 toes per litre for
petrol, 11.53 toea per litre for diesel and 14.22 toea per litre for kerosene

•This week’s BPNG auction results in Central Bank Bills offered for 28 days
and 63 days were over-subscribed by K39.0m out of the total amount of
K456.5m offered, indicating an increase in appetite for shorter dated
securities. The weighted average yield for 28 days remained unchanged at
1.41% from the previous week while 63 days was at 2.35%

•This week’s BPNG auction results in Treasury Bills were under-subscribed
by K132.11m out of a total amount of K326.96m on offer. Weighted average
yields for 182 days, 273 days and 364 days remained unchanged at 4.73%,
6.76% and 8.03% respectively from the previous week

•The KSi Index increased by 3.1% to end at 5,628.24 points underpinned by
an increase in OSH by K18.00 while the KSi Home Index decreased by
1.1% to end at 10,9117.37 points

International Market Summary:

•The US Federal Reserve raised their benchmark interest rate this week to
a target range of 1.25 – 1.50%. The Fed left its rate outlook unchanged for
the years to come at the moment while raising their GDP estimate to 2.5%

•The Fed rate hike announcement drove US stocks to rally while bond yields
and the US dollar dropped against major currencies. Dow Jones Industrial
index was up 0.7% while the NASDAQ index was up 0.2% for the week.

•Government 10-year bond yields dropped with the US rate down 2 basis
points to 2.36%, Australia and Japan bond yields were both down 0.01% to
2.52% and 0.05% respectively for the week despite the US Federal
Reserve raising the benchmark interest rate this week.

•Asia stocks slumped for the week. Shanghai Composite index was down
0.7% and Nikkei 225 index dropped 1.1% for the week due to weak regional
sentiment.

•PGK/AUD depreciated by 2.1% to end at 0.4046 while AUD/USD
appreciated by 2.1% to end the week at 0.7674

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

pdfKFM Weekly Investment Update: Friday, 15th of December 2017

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