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CEO Expresses Optimism in the Stock Market
by PNG Business News - July 15, 2021
Photo Credit: Bank South Pacific
According to firm chief executive officer Robin Fleming, interest in BSP Financial Group Ltd (BSP) shares on the Australian Securities Exchange (ASX) is strong, with the current bid price of AU$5 (K6.6).
Fleming said there were some compliance obligations that shareholders needed to fulfill when BSP got listed on the ASX last month.
Obtaining a tax clearance certificate is one of them since it is required to support the application to transfer shares from the PNGX to the ASX.
Some of the stockholders had completed the move, according to Fleming.
“A couple of our smaller shareholders have completed the migration to ASX and are in the process of completing their first trades, and BSP’s first transactions on the ASX,” Fleming said.
“We are eagerly awaiting the settlement of the first sell and buy trades on ASX.
“A larger shareholder is also going through their various approval processes.
“Interest in BSP shares is positive and the bid price is
AU$5 but it is only after the first trades are performed that the actual price will be determined
and the price is expected to
fluctuate in the first months of trade.”
BSP has been listed on the PNGX since 2003, according to group chairman Sir Kostas Constantinou, who spoke at a virtual ringing of the bell event in Port Moresby last month to celebrate the company's registration on ASX.
However, the board concluded last year that a listing on the ASX would benefit shareholders by providing them with access to a far more liquid market, as well as provide BSP with additional sources of cash to support any future growth.
Mauludu, Shirley. The National (12 July 2021). “Positive interest in shares: CEO”.
PNG Business News - March 31, 2021
BSP Changes Group Name
BSP Financial Group has replaced Bank South Pacific Limited as the company's name. Sir Kostas Constantinou, Chairman of the BSP, revealed this last week. The shareholders approved the name change, as well as other legislative amendments, according to Sir Kostas. BSP will now proceed with the filing of its application for listing on the Australian Securities Exchange (ASX). “The notice of the meeting is currently subject to advise and approvals, which are expected to be finalised during March 2021,” Sir Kostas said. According to BSP Group CEO Robin Fleming, the proposed ASX listing would provide access to new pools of capital on Australia's largest market. “While BSP has been listed since 2003 on the PNGX, there are a number of constraints that BSP faces in sourcing new forms of equity capital,” he said. “Accordingly, BSP is pursuing the proposed listing as a means of mitigating some of these constraints. Access to new sources of capital will allow BSP to explore future growth opportunities. Another benefit of joining the ASX is that it will facilitate increased liquidity for BSP’s shareholders (trading of BSP shares). The ASX is a much deeper (larger pool of investors) and (more) active market than the PNGX. Accordingly, shareholders will find it easier to trade BSP shares on the ASX.” The visibility of BSP would increase if it joined the ASX, according to Fleming. “It will provide the opportunity to better educate the international marketplace in relation to BSP and PNG,” he said. BSP's shares would be exchanged on both the PNGX and the ASX if authorised. When asked about the name change, CEO Robin Fleming confirmed that the iconic trade name of BSP would continue to be used throughout the Pacific.
PNG Business News - May 26, 2021
BSP Group Records Net Profit of K203 Million
In the first quarter of 2021, South Pacific Financial Group Ltd recorded a net profit of K203 million. According to the bank, this is a 2.6 per cent decrease from the first quarter of 2020, owing to a decrease in net insurance revenue and a rise in computing costs. Some highlights included net assets of K3.6 billion, a cost to income ratio of 40.3 per cent, a capital adequacy ratio of 25 per cent, a provision coverage ratio of 5.7 per cent, a market capitalisation of K5.6 billion, and earnings per share of 43 toea. The last 12 months had been tough, according to Group Chairman Sir Kostas Constantinou, "but we did well with the profits that we achieved." “We have an excellent staff, everybody’s committed,” he said. “It is unfortunate with the Covid-19, but we progress forward now with the inoculation of our staff who are behind it. The intention is to do most of the branches. We have had problems through the Pacific, places like Samoa, Tonga which have been restricted because of tourism. The Cook Islands have opened up so we are yet to see what happens. In spite of this, Sir Kostas remained positive. “Good times are coming for Papua New Guinea with the recent announcements on the progress of some of the country’s resource projects,” he said. “We are fortunate that we have the Papua LNG project that has been successfully completed and is proceeding with Total who’s the lead partner doing the upstream and Exxon doing the downstream. These projects are K48 billion and right on our doorstep and there’s not a lot of countries in the world that have these types of projects.” The news about P'Nyang was also embraced, according to Sir Kostas. Reference: The National (24 May 2021). Bank records first quarter profit of K203 million
PNG Business News - May 26, 2021
Bank South Pacific Joins ASX
The Bank South Pacific Financial Group Ltd has had its application to join the Australian Securities Exchange (ASX) accepted. The bank will be listed on the ASX this week, according to Group Chief Executive Officer Robin Fleming, and shareholders will be able to transfer partial shares to the ASX. “We were listed on the PNGX (PNG Stock Exchange) in 2003 but because of the size of BSP, that market capitalisation was close to K5.6 billion,” he said. “And because of the size of BSP, it was difficult for shareholders to have larger partials of shares and actively trade their shareholdings. Being listed on the Australian Stock Exchange, shareholders can move their shares either in full or in parts to the ASX and, therefore, trade their shares far more easily on a very liquid stock exchange market. PNG resident shareholders still have to go through a process in making sure their compliant with the Internal Revenue Commission (IRC) and Bank of PNG guidelines in respect to exchange control as to how they deal with any share sales. But once they move to the Australian stock exchange, they then have the capability to trade their shares far more readily and in a far more accessible format than is the case for PNG. He added, “While we have a good shareholding base in PNG because of BSP’s success, the composition of BSPs investment and the portfolio of some of the superannuation funds which is very high, we’ve been successful. Our portfolio continues to increase and even if they want to trade more actively, it is constrained by the absence of liquidity in PNG.” Sir Kostas Constantinou, the bank's chairman, said it was a watershed moment for the bank, allowing it to collect money and grow more. “It gives us liquidity, it gives our shareholders liquidity so that they can buy and sell shares and trade on the Australian Stock Exchange,” he said. Reference: The National (24 May 2021). BSP set to start trading on ASX
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.