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KFM Weekly Investment Update: Friday, 21 August 2015

Local Market Summary:

•PM Hon Peter O’Neill has highlighted great opportunities to come from India as a market
for LNG and for development of downstream processing in petrochemicals. These comments
come following meetings with executives from Indian Government-owned Oil and
Gas Company Group, Petronet LNG and GAIL (India) in New Delhi. An earlier MOU that
was signed between Petromin PNG with the ONGC Group and Petronet LNG provides an
avenue to advance these negotiations

•Amendments to the Oil and Gas Act are underway to cater in the interests of the country
Petroleum and Energy Minister Hon Nixon Duban says. “We’ve taken an audit on the Oil
and Gas Act” Duban said. With many new petroleum projects being developed in recent
times, the government will be pushing some amendments on the Oil and Gas Act which
will try and cater for the interest of this country as the Oil and Gas Act at this point in _me
is not able to accommodate these changes

•Agriculture and Livestock Minister Hon Tommy Tomscoll has announced a major ban on
import of more than ten different fruits and vegetables. The ban will be in place
until dialogue and protocols are established with the countries of origin he said

•Australian vegetable farmers will lose over A$3.8m of market in PNG due to the PNG Government
ban on fruits and vegetables. The Australian Department of Agriculture and Livestock
is liaising with PNG Government to have the ban lifted immediately

•The K732.0m international standard Lae port facilities in the Tidal Basin Project handed
over in December last year sits idle, while cargo ships are queuing up at the Lae Harbour
for berthing. Lae Port development manager Mr John Relhang said there were several
ships waiting to berth at any one _me. While PNG Ports is calling for interested sea port
terminal operators, the 240-metre wharf continues to remain idle

•The Golpu mining project in Morobe looks promising for Newcrest (NCM) the company
said in its financial year report ending June. NCM CEO Mr Sandeep Biswas said “Golpu is
an attractive project for the medium term, and our exploration and participation in early
stage projects underpin our longer term growth.” According to the report, NCM was seeking
value creation through exploration and project entry in Wamum, adjacent to Wafi-
Golpu. There was potential for discovery of high grade porphyry mineralisation at depth

•InterOil’s analysis of the latest well test data from the Elk-Antelope gas field in Gulf supports
a two-train liquefied natural gas project. In announcing financial results for the
second quarter for this year, CEO Dr Michael Hession said Antelope-5 well had exceeded
all previous Antelope well results. Appraisal of Elk-Antelope is expected to finish later this
year and will be followed by certification of the resource volume

•Government Inscribed Stock auction were undersubscribed by K89.6m out of the K160.0m
on offer. The Weighted average yields for the series 2018; 2020; 2022 and 2023 were
9.8%, 10.8%, 11.1% and 11.6% respectively

•This week’s BPNG auctions in Treasury Bills were oversubscribed by K88.3m out of the
K152.0m on offer. Weighted average yields were 4.6% for 182 days and 7.4% for 364 days
from this week’s auctions

•Both KSi Index ended the week down by 2.8% to close at 3,376.80 points while the KSi
Home Index ended the week up by 1.6% to close 9,664.70 for the week

International Market Summary:

•Growth worries in the US rattled stock markets, the S&P 500 hit a five month low this week
on concerns a deceleration in the Chinese economy would translate into slower global
growth. The Dow Jones industrial average fell 2.8% to 16,990.69, the S&P 500 lost 2.7%, to
2,035.73 and the Nasdaq Composite dropped 3.4% to 4,877.49 for the week

•Losses accelerated in European markets after Greek Prime Minister Alexis Tsipras plans to
hand in his resignation, clearing the way for early national elections. US and China continue
to push European markets down. The FTSE closed the week 2.8% lower 6,367.89 and
the German DAX dropped 5.0% in the week to 10,432.19 points

•Hong Kong stocks fell into bear-market territory, as the effects of China’s volatility spills
across its borders. The Hang Seng index in Hong Kong was down 7.3% for the week, to
22,230.90 points. Shanghai lost 10.5% in the week ending 3,548.54 points

•The ASX closed down with banks suffering the worst of the fallout from global jitters,
which largely overshadowed a busy week of corporate earnings. The ASX 200 closed at
5205.10, down 2.8% for the week. The benchmark now trades around nine-month lows

•Oil prices rose from six-year lows, but analysts say they expect prices to continue falling on
worries that the global glut of crude is growing. Light Crude closed lower 4.0% for the
week at US$40.80 per barrel while Brent slumped 6.1% to US$46.02

•The weakest Chinese manufacturing data since the global financial crisis accelerated losses
in riskier assets, sending emerging-market stocks toward their worst week in two years.
U.S. and European index futures fell, while gold surged 4.6% for the week to close
US$1,163.80 (refer to graph)

•PGK/USD lost 0.3% to 0.3595, while PGK/AUD appreciated by 0.7% to close at 0.4923 for
the week

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pdfKFM Weekly Investment Update: Friday, 21 August 2015