KFM Weekly Investment Update: Friday, 20 March 2015

Local Market Summary

• BPNG circulated its new directives in handling of outward remittances from PNG in respect of its Exchange Control. Foreign currency dealings may only be dealt via Authorised Foreign Exchange Dealers and Authorised dealers are no longer permitted to open onshore foreign currency accounts in PNG for PNG residents.

• Minister for Agriculture and Livestock, Hon Tom Tomscoll cited at the launching of a coffee nursery in Chimbu that the Government has spent K7.0m to help boost coffee development in the country in order to attain its medium term development plan of exporting six million bags of coffee by 2030. Mr Tomscoll urged farmers to be consistent in planting coffee for quality to be able to be competitive in the global market.

• Prime Minister Hon Peter O’Neil signed a list of resolutions with Hon John Momis, President of Autonomous Bougainville Government during a joint supervisory body meeting in Arawa. The resolutions support Bougainville’s poll period to determine its autonomous status for the next five years from 2015. PNG government is committed to see substantial progress with the new autonomy structure says Mr O’Neil.

• Nasfund Savings and Loans launched an online withdrawal service as an additional feature to its online banking facility for its member’s convenience. Member service and branch support manager Mr Richard Leka says that the service is aimed at minimising the time for client’s withdrawal application to be processed.

• New Britain Palm Oil’s (NBPOL) production of oil palm has been severely affected by the damages left after the flooding in West New Britain. CEO Mr Nick Thompson stated that the lower lying areas are the most affected and access to the field crops is being lost adding that he is unable to report on the immediate impacts of NBPOL’s production and operation.

• ExxonMobil PNG has spent K4.5b on landowner companies of the PNG LNG Project affected areas. According to the company, more than K11.0b had been spent in the country since the start of the project. ExxonMobil PNG responded to three major landowner companies which had criticized the Government for not giving full recognition to local companies in the project impact areas.

• InterOil has recorded a net profit after tax of US$289.8m (K726.1m) for 2014 and liquidity of US$715.0m (K1.8b), compared US$40.4m (K101.2m) in 2013. The increase in net profit was attributed to completing its Elk-Antelope transaction with Total E&P PNG and the sale of its refinery and downstream businesses to Puma Energy. CEO Dr Michael Hession said the past year has enabled the company to focus on developing Elk-Antelope and on maintaining its exploration effort in the Eastern Papuan Basin.

• New Guinea Islands Produce reported a net loss of K8.4m for 2014 compared to the profit of K2.7m in 2013. This was largely attributed to number of management challenges, changes in currencies, low world commodity prices and low production volume of cocoa. NGP’s group sales dropped by 10.6% from K232.6m to K257.2m in 2014.

• Government Inscribed Stock auction were oversubscribed by K54.0m out of the K160.0m on offer. The Weighted average yields for the series 2018; 2020; 2022 and 2023 were 9.8%, 10.8%, 11.2% and 11.5% respectively.

• This week’s BPNG auctions in Treasury Bills were oversubscribed by K63.0m out of the K100.0m on offer. Weighted average yields remained flat at 4.7% for 182 days and 7.4% for 364 days from last week’s auctions.

• The KSi index ended the week 1.3% lower to 3,600.1 from 3,651.1. Similarly the KSi Home Index closed 0.3% lower to 26.5% for the week to 9,744.1 from 9,770.7.

International Market Summary

• US stocks fell, pulling back a day after the Fed’s cautious stance on interest rates spurred strong gains. However for the week NASDAQ closed 2.5% higher to 4,992.4 while the S&P500 closed 1.7% higher to 2,089.3.

• European markets have been boosted by the ECB’s bond-buying program which has depressed returns on bonds and knocked down the euro. This has fuelled bets that a weaker euro would stimulate the region’s economy and corporate earnings.

• DAX closed the week flat to 11,899.4 while FTSE 100 reached record highs after the Bank of England dampened prospects of interest rate rises in the near term closing the week 3.3% higher to 6,962.3.

• Chinese stocks posted their biggest weekly gain in three months on hopes of further policy easing, despite losing some steam by the week’s end. Shanghai Composite Index is up 7.1% for the week to 3,612.4 (see graph in the PDF attachment below).

• Australian shares closed the week, pushing close to the 6,000-mark after a late spurt on Friday that defied a fall on Wall Street. S&P/ASX 200 rose 2.8% for the week to close to 5,975.5, while the All Ordinaries rose 3.2% for the week – closing at 6,152.9.

• Gold jumped by the most in a month and a half on Thursday after the Federal Reserve surprised markets by reducing its forecast for US economic growth and inflation.

• PGK/USD ended 0.3% low for the week to 0.3765, similarly PGK/AUD depreciated 1.1% to 0.4893

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pdfKFM Weekly Investment Update: Friday, 20 March 2015

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