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KFM Weekly Investment Update: Friday, 15 June 2018

Local Market Summary:

● Prime Minister (PM) Hon. Peter O’Neil and Chinese Ambassador Xue Bing, have officially launched the K463 million 132kv transmission lines and substations projects that will service the Highlands region. The project supports the Government’s medium-term development plan and Vision 2050 for 70% of PNG household to have electricity services by 2030

According to Deputy PM and Treasurer Hon. Charles Able, Papua New Guinea has made a bold undertaking as a host nation for the 2018 Apec meeting. He further added that such event were about global integration, participation and knowledge sharing which he believes would cap off a year of recovery for PNG in spectacular fashion

In addition, Bank of Papua New Guinea (BPNG) Governor Mr Loi Bakani recently mentioned during a recent Apec trade policy dialogue on digital trade in Port Moresby that research is currently been undertaken to carefully consider blockchain as a technology to achieve objectives of financial inclusion. The IDBox is been trialled in a remote rural village that has limited infrastructure and internet to give residents access to financial and other services for the first time

The country as a member of Parties to the Nauru Agreement adheres to management measures developed and agreed by members to include toughen fishing measures within our Exclusive Economic Zone (marine boundaries)

The Government in support with the Asian Development Bank (ADB) aims to provide electricity to 70.0% of the Pacific sub region by 2030. The energy investment costs around US$1.0b

According to Oil Search (OSH) and its joint venture partner Kumul Petroleum Holdings have successfully tested gas at Kimu 2 well in the Western and Gulf Provinces. Well data collected will be used to assess options for potential commercialisation of Kimu Field. Shares in the well are held by OSH 83.0% and Kumul Gas Niugini 17.0%

Kina Securities (KSL) advises that, pursuant to ASX Listing Rule 3.10A, 32,758,650 fully paid ordinary shares held by Fu Shan will be released from voluntary escrow in relation to the sale of these shares on 27 June 2018 following receipt of notification from BPNG that Fu Shan have complied with all of BPNG’s requirements. BPNG have notified KSL that the conditions originally applied to KSL’s Banking Licence (namely requirement to introduce a strategic partner) no longer apply

Kina Asset Management released the Net Tensible Asset (NTA) of K1.30 per share for the month of May. This is an increase of 0.78% from the previous month’s NTA

City Pharmacy (CPL) announced that its 2018 Annual General Meeting will be on 28 June at Lamana Hotel, Waigani, Port Moresby

Steamships announced during its Annual General Meeting held on 08 June that the Board resolved to pay a final dividend of K0.40 per share for the Financial Year ended 31 December 2017 to its shareholders

This week’s BPNG auctions in Central Bank Bills were under-subscribed by K17.2m out of the total amount offered K431.8m. The weighted average yield for 28 days and 63 days remained unchanged from the previous week at 1.40% and 2.35% respectively

This week’s BPNG auctions in Treasury Bills were under-subscribed by K109.6m out of the total amount offered K305.7m. The weighted average yields for 182 days and 273 days remained unchanged at 4.72% and 6.76% respectively while 364 days increase by 0.12% to 8.05% from 8.04% from the previous week

The KSi Index and KSi Home Index both dropped over the week by 0.4% and 1.0% to end at 5,202.67 and 11,126.32 respectively. This was mainly attributed to the drop in share prices of banking and financial stock Bank South Pacific and industrial stock CPL

International Market Summary:

● Global shares edged higher across the week as geopolitical concerns between the US and North Korea ease offset a drop after the US Fed Reserve pencils in a fourth rate rise for the year. US stocks were mixed, with tech-heavy Nasdaq rallying for a fourth consecutive week while the Dow Jones and S&P500 benchmarks held back by the slated increase in interest rates

● The US Dow Jones Industrial Average fell by 0.9% to 25,090 points while the S&P500 remained unchanged at 2,779.66 points and the Nasdaq Composite increased by 1.3% to 7,746.38 for the week.

● Australian share market closed on a high note as investors tended towards banks, oil explorers and mining companies due to bottom fishing. The S&P/ASX 200 and S&P/ASX 50 both increased by 0.8% to end at 6,094.03 and 5,912.90 points respectively.

● Asian stocks traded mix after the Federal Reserve forecast a fast pace of rate hikes this year, while concern about a US-China trade war also soured sentiment. The Nikkei average rose by 0.7% to 22,851.75 while both the Hang Seng and Shanghai dropped by 2.1% to 30,309.and 1.5% to 3,021.90 respectively

● PGK/AUD strengthened by 1.9% to 0.4107 while the AUD/USD depreciated by 1.9% over the week to close at 0.7463 and PGK/USD unmoved at 0.3065

pdf KFM Weekly Investment Update: Friday, 15 of June 2018

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