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KFM Weekly Investment Update: Friday, 20 October 2017

Local Market Summary

• Prime Minister Hon. Peter O’Neil has appointed Pangu Pati leader Hon. Sam Basil as the new minister for Communication, Information Technology and Energy. Hon. Sam Basil has replaced Member for Talasea Hon. Francis Maneke. Hon. Sam Basil showered his appreciation in the appointment and said he would consider responsible, affordable and accessible communication in radio, television, internet and cybercrime

• According to Minister for National Planning and Monitoring Hon. Richard Maru, a quality testing centre should be established in the country to improve standards for products that are being exported and also other products that had the potential to be exported especially to European Countries. European Union (EU) Ambassador Mr Ioannis Giogkarakis-Argyropuolos said EU’s import standard was an
opportunity for PNG to improve the quality of its exports as per the Economic Partnership Agreement Europe provides quota free and duty free access to all PNG products

• Local MP for Kikori District, Hon. Soroi Eoe and the new board members of the Kikori District Development Authority (DDA) vowed to extend project funding in the district, especially in the health and education sectors. Hon. Eoe confirmed that the DDA currently has about K1.0m to initiate the urgent development of these abandoned projects

• After several awareness campaigns, the communities along the West Coast of Namatanai, New Ireland Province have eventually showered support for the Solwara 1 project. Nautilus Minerals’ manager for community and government relations Mr Standley Komunt said the company was committed to working with the people and has also submitted its environmental management and monitoring plan to be assessed by Conservation Environment Protection Authority

• Pacific MMI (PMMI) announced the appointment of a new CEO Mr Laurens van der Gaag succeeding acting CEO Mr Angus Maciver who will be joining PMMI’s board. Mr Gaag has been in the insurance business for over 45 years and was also the former general manager for PMMI. Mr Gaag said the reappointment at this time was challenging especially in terms of the country’s current economy but the company is confident with its dedicated staff to deliver insurance through economic booms and withers

• The first four exploration holes drilled in the K92 Mining (K92) have been reported to contain high grades of copper, gold and silver. These drills results over a length 100 m confirm K92 initial interpretation that the Kora Vein extends about 500 m to the north from the closest point of the current Kora deposit. K92’s chief executive and director Mr John Lewins said the results from the first four diamond holes combined with excellent results achieved from processing the first part of the bulk sample gives them increasing confidence in the mine’s operations

•Oil Search has recorded a revenue of K1,208.9m (US$380.8m), an increase of 15.0% in the third quarter of 2017. As per the third quarter report there was a 9.0% increase as a result of selling 32,851 billion Btu of LNG including 29 LNG cargosover the period. Liquid sales for oil, condensate and naphtha also rose 52.0% higher than the previous quarter

• This week’s BPNG auctions in Central Bank Bills were offered for 28 days only with over-subscription of K13.0m out of total amount of K349.5m on offer. The weighted average yield increased by 0.02% to 1.39% from the previous week

• This week’s BPNG auctions in Treasury Bills were under-subscribed by K8.4m out of a total amount of K191.2m on offer. Weighted average yields for 91 days, 182 days, 273 days and 364 days were at 2.45%, 4.73%,6.76% and 8.00% respectively

• The KSi Index ended the week with a gain of 0.1% to close at 5,275.96 lifted by the rise in share prices of BSP and Oil Search to end at K9.46 and K17.71 respectively. The KSi Home Index gain by 0.1% to close at 10,997.29 points

International Market Summary

• US Senate has adopted a fiscal 2018 budget resolution which will give momentum to President Donald Trump’s plan to enact tax cuts. The final approval of the measure will set off a furious lobbying battle as Republicans attempt to enact a bill by the end of the year. DJIA ended 23,163.04 points up 1.3%. Likewise S&P 500 was also up by 0.3% while the NASDAQ remained unchanged

• The closure of the GM Holden plant on Friday marked the end of Australia’s 100 year automotive industry. GM Holden Ltd closed its plant in South Australia to move manufacturing to cheaper locations, a year after Toyota Motor Corp and Ford Motor Co also moved out of Australia, eliminating thousands of manufacturing jobs in the country. The S&P/ASX 200 and S&P/ASX closed for the week at 5,906.99 points and 5,822.60 points respectively

• Asian shares were up for the week following news that the US Senate had approved a budget blueprint for the 2018 fiscal year which would allow for Republicans to push for a tax – cut package without support from the Democrats. Japan’s Nikkei share average finished at 21,457.64 points up 1.4%], recording its longest winning session since 1961

• PGK/USD remained unchanged for the week to close at 0.3125 while PGK/AUD depreciated by 0.2% to end at 0.3984

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

pdfKFM Weekly Investment Update: Friday, 20 October 2017

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