Capital Markets
From The Report: Papua New Guinea 2012
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With only 20 firms listed, the Port Moresby Stock Exchange (POMSoX) is subject to volatility, but market capitalisation is on an upward growth trend. Like the country’s formal economy, the bourse is dominated by mining and energy firms, along with related sectors like financial services and transport. PNG also has a thriving primary bond market, driven by commercial banks purchasing T-bills and C-bills with a short-term maturity. The government is working with POMSox to develop a secondary bond market for these instruments, which could boost PNG’s international credit rating and make it more attractive as an investment destination.
This chapter features interviews with Geoff Mason, General Manager, Port Moresby Stock Exchange (POMSoX); and Ian Mason, General Manager, BSP Capital.
Articles from this Chapter
Attracting attention: Economic growth and steadily rising incomes could boost activity
Building capacity: The market regulator is expected to benefit from new initiativesOBGplus
While Papua New Guinea’s capital markets have grown dramatically in recent years, the Securities Commission of PNG (SCPNG) has not developed at the same rate. The regulator is widely viewed among market participants and related firms as inadequate, underfunded and unable to effectively supervise the Port Moresby Stock Exchange (POMSoX). According to a report released in May 2011 by the Asian Development Bank (ADB), the SCPNG is in need of a structural review. The regulator is expected to benefit…
OBG talks to Geoff Mason, General Manager, Port Moresby Stock Exchange (POMSoX)OBGplus
Interview: Geoff Mason What developments do you anticipate in the capital markets sector in 2012? GEOFF MASON: POMSoX would welcome the opportunity to have greater participation in discussing ways to develop capital markets in Papua New Guinea. A strong stock market is the cornerstone of any capital market: it connects capital with investment opportunities through both the primary and secondary markets. In addition, POMSoX would like to explore the possibility of running a secondary market in government…
OBG talks to Ian Mason, General Manager, BSP CapitalOBGplus
Interview:Ian Mason What challenges do you foresee with the development of the stock exchange? MASON: We can look at it from two angles, by analysing either the share market price performance or its internal mechanisms and how the Port Moresby Stock Exchange (POMSoX) is evolving. The bourse was formed 13 years ago and currently lists 18 companies, half of which are dually listed mainly in Australia but also in London and Toronto. The market is relatively illiquid because we have a limited…
Oil Search: HydrocarbonsOBGplus
THE COMPANY: Oil Search (OSH) was incorporated in Papua New Guinea in 1929. It is PNG’s largest hydrocarbons producer and operates all of the country’s currently producing oil and gas fields. OSH has a 29% interest in the PNG liquefied natural gas (LNG) project operated by ExxonMobil, which commenced full construction in March 2010. The first LNG sales are scheduled for 2014. At the end of 2011 OSH had 2P reserves of 553m barrels of oil equivalent, including 505m barrels of oil equivalent relating to the PNG LNG project, and contingent 2C resources of 318m barrels of oil equivalent. OSH is publicly listed on both the Australian Stock…
Bank South Pacific: BankingOBGplus
THE COMPANY: Incorporated in 1974, Bank South Pacific (BSP) has grown to become the largest bank in the South Pacific. BSP is also Papua New Guinea’s largest bank, despite the presence of international competitors. BSP was listed on the Port Moresby Stock Exchange in 2003, and the company has subsequently made acquisitions and opened operations in Niue (2004), Fiji (2006) and the Solomon Islands (2007). BSP’s presence in the Pacific includes 41 network branches in PNG, 20 in Fiji, seven in the Solomon Islands and one in Niue. Despite the significant acquisitions made over the years, BSP has maintained solid growth in profits. Net profit…
Credit Corporation: FinanceOBGplus
THE COMPANY: Credit Corporation (CCP) began business in 1978 as a general finance company, and has grown to become one of Papua New Guinea’s most progressive institutions. CCP specialises in providing a range of financial products and services and, through its subsidiaries, it owns and manages a portfolio of prime real estate assets. Shareholders have received dividends each year since the incorporation of the company in 1978. CCP was listed on the Port Moresby Stock Exchange (POMSoX) in 2000. Assets and core operating profits have continued to grow. Over the past five years CCP’s year-on-year core operating profit growth averaged 19%,…
City Pharmacy: PharmaceuticalsOBGplus
THE COMPANY: City Pharmacy (CPL) was established in 1986. It is one of the leading retail/wholesale companies in Papua New Guinea, with branches located through out the country. CPL operates pharmacies, supermarkets, hardware supply stores and Bon Café outlets. The company was listed on the Port Moresby Stock Exchange in 2002, and is one of the top performing stocks on the bourse. CPL bought the Stop ‘n’ Shop supermarket business from Steamships Trading Company in 2005 and integrated it with the City Pharmacy business. Following the acquisition, sales from the combined businesses grew at a compound average growth rate (CAGR) of 108%,…
New Britain Palm Oil: AgricultureOBGplus
THE COMPANY: New Britain Palm Oil (NBO) is a large-scale integrated industrial producer of sustainable palm oil in the Australasian region, based in Papua New Guinea. The company has palm oil and sugar plantations located in PNG, the Solomon Islands and Malaysia. It also operates an oil refinery in Liverpool, in the UK. NBO is dual listed on the Port Moresby Stock Exchange and the London Stock Exchange. The company has made a number of acquisitions in PNG and the Solomon Islands since its inception in 1967. The group acquired Guadalcanal Plains Palm Oil in the Solomon Islands in 2006. Then, two years later, it took over Ramu Agri Industries…
Highlands Pacific: MineralsOBGplus
THE COMPANY: Highlands Pacific (HIG) is a diversified mineral resource company that is listed on both the Australian Stock Exchange and the Port Moresby Stock Exchange. It has projects that include the Ramu nickel and cobalt mine, the Frieda River gold and copper project and the Star Mountains exploration tenements. Ramu is fully constructed, at a cost of $1.5bn, by the developer, Ramu NiCo. HIG has an 8.56% interest that will increase to 11.3% at no cost after repayment of the project debt (estimated to be in eight years time). From commissioning, HIG has access to its pro-rata 8.56% share of Ramu’s post-debt-servicing net cash flow.…
