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KFM Weekly Investment Update: Friday, 22 June 2018

Local Market Summary:

● Minister for Trade, Commerce and Industry Hon. Wera Mori has described the focusing shifts on diversifying economic zones in the country to allow for inclusive economic growth. He stated that the country cannot depend entirely on the mineral and petroleum industries as it is unsustainable and cannot generate revenue in the long run hence his Ministry will work closely with the Department of National Planning and Monitoring on the agenda of diversifying economic zones to include investment, food security for quality exports, support to boost local industry allowing domestication of production and reduce imports and boost small medium enterprises

● Prime Minister (PM) Hon. Peter O’Neil, CMG MP has travelled to the Republic of China for an official visit to strengthen trade relations, enhance employment opportunities as several new agreements were to be signed. PM Hon. O’Neil stated that as a developing country, we need to further integrate our economy to the global economy and the engagement with China will further broaden the country’s trade and investment opportunities

● Kumul Telikom (KTHL) announced the upgrade and migration of services on its PPc-1 cable link between Madang and Sydney to increase international traffic from 6Gbps to 10Gbps. The upgrade would be jointly undertaken by DataCo and Telikom PNG (Telikom) who are both subsidiaries of KTHL. Both efforts are preparations for the Apec Leaders’ Summit in November. DataCo and Telikom, in a joint press conference addressed by their respective heads indicated that the expected gain for both entities would be to have equal share of the 10Gbps capacity so as to enable the parent company to fully utilise its assets

● Newcrest Mining (NCM) settled the insurance claim worth US$155.0m with the Company’s insurers in relation to the April 14, 2017 seismic event at the Cadia operation. The amount will be included in NCM’s Statutory Profit for the 2018 financial year

● The Board of PNG Air (CGA) announced the appointment of Mr William Laudin Lamur, OBE as an additional Director to the Company and also elected Chairman of CGA’s Board of Directors effective June 19. Mr Lamur has a wealth of Board experience as well as enormous experience at chief executive officer levels across various industries. Mr Lamur brings integrity, business acumen and has well developed skills in high level strategic and corporate planning, business development, marketing and corporate governance

● Conversely, POMSoX advised that the securities of CGA (the “Company”) will be suspended from quotation immediately under Listing Rules 17.2, at the request of the Company, pending the release of an announcement by the Company

● This month’s BPNG auctions in Government Inscribed Stock were oversubscribed by K12.5m out of the total amount offered K70.0m. The weighted average yields for S15022021 was up 0.02% to 9.50%, S15052022 remained unchanged at 10.48%, S15052025 at 11.54% and S15112028 up 0.01% to 12.58% from the previous month

● This week’s BPNG auctions in Central Bank Bills were under-subscribed by K301.0m out of the total amount offered K745.3m. 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 K91.0m out of the total amount offered K235.7m. The weighted average yields for 182 days and 273 days remained unchanged at 4.72% and 6.76% respectively while 364 days decreased by 0.01% to 8.04% from 8.05% from the previous week

● The KSi Index increased by 0.1% to 5,208.06 while the KSi Home Index dropped over the week by 0.1% end at 11,126.32 respectively. This was mainly attributed to the drop in share price of industrial stock City Pharmacy by 9.1% to K0.60 from K0.66

International Market Summary:

● Global shares were mostly lower across the week as a sharp escalation in USChina trade tensions rattled markets. US stocks were mixed with a late-week slump pulling the Nasdaq from record highs, while the Dow notching eight straight declines

● All main indexes in the US closed lower on Thursday with the Dow Jones Industrial Average at 2.5% to 24,461.70, S&P500 at 1.1% to 2,749.76 and the Nasdaq Composite at 0.4% to 7,712.95 points for the week

● Australian shares largely bucked the weak overseas leads and rallied to a 10year high as strength in the banks and a falling AUD benefiting exporters helped to rally the marker higher. Both the S&P/ASX 200 and S&P/ASX 50 closed higher by 2.2% to 6,225.20 and 2.6% to 6,066.80 points to end the week

● Major Asian markets closed lower to end the week, following losses seen on Wall Street and amid investor concerns about the trade dispute between the US and China. The Nikkei lower by 1.5% to 22,516.83, Hang Seng by 3.3% to 29,320.13 and the Shanghai closed the worst at 4.7% to 2,881.18 points

● Oil prices rose ahead of a highly watched meeting of OPEC and non-OPEC oil producers later today. Both the light and brent crude increased by 2.0% to US$66.38 and 0.8% to US$74.00

pdf KFM Weekly Investment Update: Friday, 22 of June 2018

 

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