Capital Markets
From The Report: Papua New Guinea 2014
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Although still fledgling, Papua New Guinea’s capital markets have strong prospects for growth as the economy looks forward to significant foreign currency inflows linked to the liquefied natural gas project and the development of new resource projects. With 13 dual-listed stocks on the exchange, share prices on the Port Moresby Stock Exchange are highly dependent on movements in foreign bourses, with a one to two day delay. PNG’s stock exchange is relatively shallow, with only 20 listed equities in total and one convertible note. The bourse has shown little growth since 2009, but, with prospects of a second major liquefied natural gas project and future mining deals, global investor appetite for frontier markets could broaden to PNG in coming years. Meanwhile, the strong growth in outstanding government bonds through primary auctions should generate enough momentum in PNG to launch a regulated secondary market in the near term. This chapter contains interviews with Richard Borysiewicz, General Manager, BSB Capital; and Ian Tarutia, CEO, National Superannuation Fund.

Articles from this Chapter

Overview

The sector is set to benefit from increased interest at home and abroad
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Although still fledgling, Papua New Guinea’s capital markets have strong prospects for growth as the economy looks forward to significant foreign-currency inflows linked to the liquefied natural gas (LNG) project and the development of new resource projects. According to ANZ Bank’s projections for medium-term growth, PNG will require some $112bn in new investments by 2030. Though the equity market is dominated by plays on the country’s natural resources, reform of the regulatory framework and…

Analysis

Plans are under way to focus on the potential of local firms
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Although the Port Moresby Stock Exchange (POMSoX) witnessed two new initial public offerings (IPOs) in 2013, the market of 20 stocks, 13 of which are dual listed offshore and one of which is inactive, remains dominated by 12 listed firms in the mining and oil and gas sectors. Financial services, retail, aviation and agroindustry are also featured on the exchange, but remain marginal. Local listings have been driven by compliance requirements for firms moving towards production on their assets in…

Interview

OBG talks to Richard Borysiewicz, General Manager, BSP Capital
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Interview:Richard Borysiewicz How well did the Kina Security Index perform in 2013 compared with other regional securities? RICHARD BORYSIEWICZ: 2013 was not a very successful year for the Kina Security Index, which continued to be driven by large stocks such as Oil Search and BSP, both of which softened. However, this should not be regarded as a statement about the market as a whole, as both stocks remain strong, but rather speaks to the lack of liquidity and the desire to diversify. We…

Interview

OBG talks to Ian Tarutia, CEO, National Superannuation Fund
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Interview:Ian Tarutia How would you assess the current performance of the superannuation industry? IAN TARUTIA: I believe that the superannuation industry in Papua New Guinea (PNG) is thriving in terms of profitability, membership growth and client servicing. Having said that, the industry is mature enough for the various players to become more proactively engaged in improving performance. It would be possible to make a difference in some critical areas of the domestic economy such as health…

Overview

Looking to new ways to attract foreign portfolio investment
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The government’s reliance on the domestic capital markets to fund its widening budget deficits has grown in recent years. The Treasury has sought to lengthen the maturity of its obligations and shift gradually from relying on Treasury Bills (T-Bills) to bonds to reduce refinancing risks. Despite abundant liquidity in the domestic financial system, commercial banks claim they are increasingly broaching their single-borrower sovereign exposure limits. Although the introduction of a real-time gross…

Analysis

Finance
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The Company In 2013 Credit Corporation (CCP) reported its group core cash operating profit increased to $34.63m compared to $32.74m in 2012. Net earnings after tax were down 45% to $24.03m. Negative adjustments of $703,245 from investments in traded equities and $2.79m from fair value assessment of investment property were booked against profit in 2014. The share price declined to PGK7.98 ($3.24) at the end of December 2013, from PGK8.06 ($3.28) in 2012. Cash at the end of December was $10.70m, while total assets increased from $410.13m to $423.71m and shareholder equity rose from $327.42m to $339.38m. A dividend of $15.52m was distributed during…

Analysis

New Britain Palm Oil: Agro-industry
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The Company New Britain Palm Oil (NBO) is a largescale integrated industrial producer of sustainable palm oil based in Papua New Guinea. It has palm oil and sugar plantations in PNG, the Solomon Islands and Malaysia and an oil refinery in Liverpool, England. NBO is dual listed on the Port Moresby and London exchanges. NBO has made several 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. It took over Ramu Agri-Industries ( formerly Ramu Sugar) in 2008, adding sugar and beef production to the group. In 2010 it acquired 80% of Kula Palm Oil (formerly…