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Kina Depreciates Against All Major Currencies - Except the Yen
by PNG Business News - April 12, 2021
According to the Bank of PNG (BPNG), the average regular kina exchange rate has depreciated against all major currencies except the Japanese yen as of March 8.
The kina depreciated by 8.1 per cent against the Australian dollar, 7.5 per cent against the British pound sterling, 2.8 per cent against the Euro, and 0.9 per cent against the US dollar, according to BPNG's quarterly economic bulletin for the September 2020 quarter. It appreciated by 1.3 per cent against the Japanese yen.
BPNG Governor Loi Bakani said the country's foreign exchange reserves were K9.5 billion (US$2.7 billion) at the end of December.
“As of March 5, 2021, the level of foreign exchange reserves decreased to K8.46 billion (US$2.41 billion), reflecting debt service payments for the Government and intervention by the Central Bank in the foreign exchange market,” he said.
Meanwhile, the global economy shows signs of improvement in the December quarter of last year, according to reports.
However, the second phase of the Covid-19 pandemic, which included a new virus, began to hit major economies, delaying recovery.
“As a result, most countries have not completely opened up their borders to the movement of people,” he said. “The development and trial of Covid-19 vaccines that continued into the last quarter of 2020 provided some level of confidence for the global market and the world economy. In its January world economic outlook (WEO) update, the International Monetary Fund, projected the world economy to contract by 3.5 per cent in 2020 from its earlier projection of a decline of 4.4 per cent in the October WEO. For 2021, recovery has been upgraded with a growth rate of 5.5 per cent, reflecting the trial and introduction of Covid-19 vaccines.”
PNG Business News - March 18, 2021
Kina Bank supports KTF education program for second year
Kina Bank has pledged support for the second consecutive year to the FODE education program administered by the Kokoda Track Foundation at the Motu Koita FODE centre in Port Moresby. The bank is funding the FODE program and providing mentoring by bank staff to students enrolled at the centre. The one-on-one mentoring program offers students the opportunity to connect with young and seasoned professionals across the bank who provide coaching, and help with their studies, assessments and to prepare for exams. Building on the success of last year, students have direct personal access to a mentor who can guide them on their path to success and help them reach their goals. "Our partnership with Kina Bank is that in every sense of the word. From vital financial support, to their innovative volunteer mentoring program and all of the 'small' ways they assist our work in between, we are proud to partner with Kina Bank and are delighted to continue developing our partnership this year," said KTF CEO, Dr Genevieve Nelson. "In these challenging times, we are poised to deliver a full year of learning to our students, committed to the safety of our students and staff. We are fortunate to have an incredible partner like Kina Bank by our side on this education journey." Kokoda Track Foundation reported to have enrolled 150, an increase in numbers from 2020. “Continuing the partnership with the Foundation for Motu Koita FODE was an easy decision for us, building further on the success of the previous year and to see through some of the students in grades 10 and 11 mentored last year,” said Greg Pawson Kina Bank Chief Executive Officer. “The bank is committed to helping create the workforce of the future by supporting the learning and development of young people in Papua New Guinea. Initiatives such as the Motu Koita FODE program gives a second chance to young people to attain high school certification and progress to higher education and eventually transition into employment with skills and qualifications. At Kina Bank we’re committed to supporting our communities.”
PNG Business News - March 29, 2021
ICCC Evaluating Kina Banks Acquisition of Westpac
Kina Securities Ltd (KSL) has sent an application to the Independent Consumer Competition Commission (ICCC) for approval of its proposed acquisition of Westpac's Pacific company. Through the authorisation process, ICCC will determine the acquisition's competition consequences and public gains, according to Commissioner and Chief Executive Officer Paulus Ain. This will be achieved by a public review process in which the ICCC will accept comments from stakeholders and the general public before reaching a definitive judgment about whether or not to approve the acquisition under the ICCC Act. “The process that ICCC will conduct is very transparent and it is very important for the people of this country, especially from the finance and banking sector, to get themselves involved,” Ain said. “The process has now started and we are formally inviting the people in the finance and banking sector, other commentators, interested parties and the public to the process on assessment. We are looking forward to seeing a lot of submissions come in and this process starts effectively today (Friday).” KSL is awaiting ICCC approval to purchase 89.91 per cent of Westpac PNG Ltd. The proposed acquisition has reached the threshold needed under section 81 of the ICCC Act for mandatory notification and obtaining ICCC approval to continue with the acquisition, according to the ICCC. The authorisation process, according to Ain, has no bearing on the ICCC's decision on who buys. “This is something that ICCC does not or is not required by law to do this,” he said. “It’s outside of the ICCC’s role.”
PNG Business News - March 16, 2021
KAML Makes A Profit of K3.3 Million
The Kina Asset Management Ltd (KAML) made a net profit of K3.32 million for the year ended December 31, 2020, thanks to a 6.2 per cent investment return. The achievement was made amid the Covid-19 pandemic and continuing geopolitical conflicts, according to KAML chairman Sir Rabbie Namaliu. Sir Rabbie praised KAML's investment strategy's diversification for providing a substantial measure of stability in a tumultuous year. He said, “Asset allocation was maintained close to the preferred portfolio asset weights of 40 per cent domestic/60 per cent international, the latter being held in Australian stocks and global indexed funds. For KAML, this meant overall capital losses were more than offset by dividend and interest income and strong foreign exchange gains. Bank of South Pacific, KAML’s core domestic shareholding, comprising nearly 20 per cent of the portfolio, generated a return of 13.3m per cent for the year. Credit Corporation also performed strongly.” Sir Rabbie, on the other hand, reported that Oil Quest and Kina Securities had experienced major reversals. “Oil Search, badly affected by the pandemic-related fall in the global demand for oil, reported a negative return for the fund of -39.6 per cent,” he said. “Offshore, the recovery in Australia was less strong than in other markets, notably the United States. The year ended with modest overall capital losses on the Australian component of the portfolio, but the strength of the Australian dollar and a series of gradual reductions in the PGK/USD trading band by the Bank of PNG, more than offset this.” Sir Rabbie reported that the net tangible asset backing per share was K1.59 as of December 31. “However, KAML’s price of K0.90 per share represented a substantial discount to the underlying value of the company,” he said.
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PNG Business News - May 13, 2021
National Airport Corporation to Focus on Redevelopment Projects
The National Airports Corporation plans to devote more resources to the redevelopment projects at Kavieng, Tari, and Mendi airports as part of the Civil Aviation Growth Investment Program. With the exception of three airports, all airports under the CADIP program are on a budget, according to NAC acting managing director Rex Kiponge. Apart from Jackson Airport in Port Moresby, Kiponge claims that the majority of the country's airports are unable to handle the newly launched F100 aircraft. “The introduction of F100 aircraft has deteriorated the condition of runways in PNG. Under CADIP, fencing and runway length deficiencies will now meet the F100 and ICAO requirements. CADIP was implemented to meet the minimum PNG Civil Aviation Rules (CARS) and the International Civil Aviation Organisation (ICAO) standards and recommended practices in all the 22 airports in the country. “The F100 aircraft require a minimum runway length of 1900 metres –– only three airports meet this requirement.” The F100 will be able to land at 12 airports thanks to a CADIP runway length upgrade. Port Moresby is now the only province that meets the operating criteria for F100 planes. Standby control, security fencing, apron parking, runway, taxiway, and apron strength, and a runway length suitable for takeoff at maximum payload are all part of the 22 airport upgrades. Kiponge recently visited the three airports and expressed his satisfaction with the development. Contractors have already finished construction on the security fence at Kavieng Airport, and work on the runway extension is going well. Once the runway extension is complete, the contractors can begin work on the terminal. He mentioned that the runway extension at Tari Airport is complete, and contractors are currently working on the apron, which will be finished until the runway extension is completed. Owing to the contractors' inability to obtain materials for the runway at Mendi Airport, NAC has requested that they redo the runway before moving on to the other areas. “Despite whatever issues within NAC, I will ensure that all 22 NAC’s airports undergoing upgrading will be completed and I will put in a lot of efforts and focus to makes certain work is done well and completed,” Kiponge said.
PNG Business News - May 13, 2021
Govt to Focus on Downstream Processing
The government is putting a lot of effort into encouraging downstream production in the region. This was said by Prime Minister James Marape during a visit to Paradise Foods Company Limited. “We are focused on downstream processing as far as going forward is concerned –– instead of exporting raw products,” said Marape. “We want to go downstream to satisfy our local markets as well as export to economies around us.” PNG is fortunate, according to Marape, to have access to 60% of the world's gross domestic product (GDP) through the APEC network. “As well as, not just the APEC network, but in the vicinity of PNG’s accessibility to markets, we have over 4 billion people from the Pacific, Northern Asia, Western Asia and Northeast Asia put together. “So to satisfy our local markets in PNG for our 8 million-plus people, as well as the opportunity of exporting to markets closest to us like our neighbouring countries.” Marape has stated that he supports downstream production and marketing of PNG's natural resources both locally and internationally. “Today, I am privileged to visit an industry that has been at work since 1945, and I’d like to thank Paradise Foods Company Limited for doing a wonderful job and feeding our country.” Marape promised that the government will help the industry and market.
PNG Business News - May 13, 2021
Mayur Discusses Power Plant Project in Lae
Mayur Resources Ltd says it has formed an ongoing relationship with the State negotiation team to discuss and finalize a power purchase agreement (PPA) for its planned power plant in Lae, Morobe. The organization was waiting for the State negotiation team's makeup to be finalized and signed off, according to managing director Paul Mulder. After that, he said, the Enviro Energy Park (EEP) project's final discussions and negotiations will begin. Mayur's planned 52.5-megawatt EEP project is an advanced power plant that will produce more efficient and cheaper electricity than current solutions by combining conventional thermal energy (sourced from the company's wholly-owned Depot Creek project), solar, and biomass woodchip, while also supplying co-generated steam to nearby industrial users who were burning diesel for their steam needs. The EEP, which is near Lae, will also have steam as a by-product for local industrial uses, and potential dual fuel systems will allow for the use of diesel. “The energy park would balance the need for new environmentally friendly technologies and reliable energy,” Mulder said.