Local Market Summary
• Finance Minister Mr James Marape said that as part of the Governments efforts in cleaning up its accounts, government expenditure cheques printed in the 2015 financial year will be cancelled. The decision was made in consultation with the Treasury, National Planning and the Prime Minister as the State will be operating on 2016 commitments and payments
• The State will focus on its core priorities due to global economic contraction and the under budget revenue collection per 2015 budget, says Finance Minister, Mr James Marape
• PM Hon Peter O’Neil and Agricultural and Livestock Minister, Mr Tommy Tomscoll in a statement said due to public concerns over vegetable imports, the State has revised the issuance of import permits. Mr O’ Neil says the adjustment will be implemented in a structured way for foreign producers to adopt to the new system before permits are awarded
• IRC Commissioner General Betty Palaso presented PNG’s tax regime to the Philippines Chinese Chamber of Commerce and Industry specifying that Investments such as agriculture production, manufacturing, constructions, hotels and financial intermediation and other business activities in rural areas will be accorded a 10 year tax holiday. Ms Palaso stated that the logic behind
this incentive is to encourage development in the rural areas that have nominal access to government services.
• National Fisheries Authority (NFA) is looking to create the next tuna capital in PNG within the Asia Pacific Region as there is room for expansion and establishment of infrastructure to increase tonnage and processing facilities. NFA Project Analyst, Mr Ivekolia says that PNG boasts an economic exclusive zone that supplies 15.0% of the world’s total catch and that these would be a growing industry in PNG
• After a full year of operation in 2015, the Telecommunications Company bmobile-Vodafone is expected to roll out 150 more towers this year according to CEO, Sundar Ramamurthy. Despite the growing demand in the rural areas, the company is focused to fix its network prior to its roll out plan.
• The Independent Consumer and Competition Commission (ICCC) came out in a statement saying that it would start controlling prices of goods and services if business houses refused to comply with prices set by ICCC. ICCC Commissioner, Mr Paulius Ain said that the consumer watchdog noted the significant decline in global crude price (down 69%) and subsequently domestic
retail prices for petrol, diesel and kerosene were also down
• This week’s BPNG auctions in Central Banks Bills were only offered for 28 days with an under subscription of K178.0m out of total of K751.0m on offer. The weighted average yield was at 1.24%
• This week’s BPNG auctions in Treasury Bills were undersubscribed by K142.6m out of a total K340.0m on offer indicating weaker appetite for short term securities. The weighted average yield for 63 days was 2.5%, 91 days was 2.6%, 182 days was 4.7% and 364 days was at 7.6%
• The KSi Index ended the week down by 0.6% to close at 3,355.45 points, underpinned by a drop in Kina Securities (-7.5%) and Oil Search (-1.1%), the KSi Home Index was also down by 0.9%, reflecting decline in pharmaceutical stock City Pharmacy (-1.5%), to end at 9,346.32 points
International Market Summary
• The European Central Bank (ECB) managed to contain some of the suspicion for the time being after ECB President Mario Draghi hinted strongly that easing could be coming within months. Fading growth and inflation prospects will force the central bank to review its policy stance in March, Draghi said
• A rebound in oil prices and reassuring words from the ECB sent U.S. stocks higher on Thursday, a positive change towards recovery after a series of sharp selloffs in the beginning of the year. The S&P 500 was down 0.6% for the week
• Asian stocks rose after a hint of more monetary easing by the ECB and a bounce in crude oil from 12-year lows helped soothe concerned markets. After a sharp decline when crude prices dropped below $28/bbl during the week, Shanghai index pulled through 0.3% while Nikkei was still in the red for the week down by 1.1%
• Chinese stocks and Yuan currency have come under pressure as a raft of economic indicators confirmed the country’s declining growth, putting the world’s second-largest economy at the top of global investors’ worry list along with plunging crude oil prices to new lows during the week
• Oil prices recovered on Friday after reaching its lowest during the week at U$28/bbl supported by freezing weather conditions and snowstorms in the U.S. East Coast and parts of continental Europe, lifting demand for heating oil. A mild start to winter in large parts of the northern hemisphere led to weaker-than usual demand for oil and exacerbated a plunge in prices. Oil prices settled in the green with Light Crude at U$30.7/bbl and Brent Crude at U$30.6/bbl
• PGK/USD inched higher for the week by 0.4% to end at 0.3327 while PGK/AUD fell by 1.9% to close at 0.4737 caused by a pick-up in AUD/USD, up 2.3% to close at 0.7023
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