Finance

Finance

PNG Business News - April 25, 2022

Govt Reaches Revenue Targets, Says Treasurer

Treasurer Ian Ling-Stuckey claims that budget repair enabled the government to reach its income and finance objectives while also keeping spending under control in last year's budget. In presenting the Final Budget Outcome (FBO) for 2021, Ling-Stuckey said that the budget deficit was preserved at K6.3 billion, down from the K6.6 billion predicted and that spending was increased by K20 billion owing to more outstanding donor funds. Higher tax collections and donor funds provided K13.9 billion in income. “As a share of our GDP (gross domestic product), the deficit drops from 8.9 per cent of GDP in 2020 down to 6.7 per cent in 2021. A reduction of over K1bil from the K7bil in 2020,” Ling-Stuckey said. “By international standards, this is an extraordinary turnaround in just one year – an improvement of 2.2 percentage points of GDP, more than double what would be regarded internationally as a reasonable rate of repair. “Budget repair and reconstruction build international credibility.” The government got K4.9 billion in solid, low-cost overseas funding, according to the Treasurer. “Our constructive, open and transparent international engagements also led to a major increase in international grant support. “We budgeted for K1bil in international grant support in 2021 and received K2.1bil, more than double. An extra K1 billion in grant support.”.   Reference: The National (22 April 2022). “Govt met revenue targets: Treasurer”. 

Finance

PNG Business News - March 28, 2022

PM Marape announces record K10 billion in foreign exchange

Photo: PM Marape announcing the good news in Parliament recently. Picture courtesy of PARLIAMENT MEDIA In the midst of the worldwide crisis caused by the Russia-Ukraine war, James Marape claims that the Bank of PNG has the largest amounts of foreign exchange ever, totaling more than K10 billion. This is in sharp contrast to the O'Neill era, when foreign exchange reserves were dangerously low and importers had to wait extended periods of time for US dollars. PM Marape announced the good news in Parliament, in response to a query from NCD Governor, Hon. Powes Parkop was asked if PNG had enough currency for petroleum importers, notably Puma Energy, which operates the Napanapa Refinery. “At this point in time, Bank of PNG has more foreign reserves than it has every had, more so for the last 10 years,” he said. “Today, we have got K10 billion-plus, or about US$3 billion  sitting in our foreign reserves. “This means that important customers like Puma, and others who need forex, should have easy access now to US dollars for their purchases.” If Puma is having trouble accessing foreign funds to bring in gasoline, PM Marape says they should meet Treasurer Hon. To help, Ian Ling-Stuckey or himself. “This is so that in these tough times, we don’t have queues (for forex), or shortage of fuel in our country,” he said. PM Marape responded to a query about whether Napanapa could get oil from Kutubu in the Southern Highlands by saying that Kutubu had set contracts but could also meet domestic market commitments. “As you know, Kutubu Crude has export contracts to it, but this is something that we are looking at going forward into the future,” he said. “That is why this Government has already been aggressive in the domestic market obligation side of gas, so that we move into the space of downstream. “Downstream processing is something that we have overlooked in our country for many, many years, but we are now moving to get more from our oil and gas so that we Move into downstream processing. “This is so that in the future we are not so dependent on imported items like fuel, we are not dependent on external market forces, where a price rise means rise in prices in our domestic economy.”   Reference: PM James Marape News Page (23 March 2022). “PM Marape announces record K10 billion in foreign exchange”.

Finance

PNG Business News - February 17, 2022

Bank of Papua New Guinea: Foreign Exchange Increases

Photo: Bank of Papua New Guinea According to a top official, the volume of foreign exchange in Papua New Guinea increased over a six-month period last year. Benny Popoitai, the acting governor of the Bank of Papua New Guinea, said this was mainly owing to the World Bank's budget assistance loan, liquefied natural gas (LNG) tax collections, and donor funding. Foreign exchange reserves were at US$2.49 billion (about K8.625 billion) on June 30 last year and had risen to US$2.6 billion (around K8.997 billion) on December 7. BPNG has maintained its accommodating monetary policy stance since the easing in March 2020, according to Popoitai, in order to assist economic recovery. The cash reserve requirement (CRR) and kina facility rate (KFR) remained unchanged at 3.0% and 7.00%, respectively. Except for the Japanese yen and the euro, he claimed the average daily kina exchange rate fell against all major currencies. He said the kina had declined by 0.2 per cent to US$0.2850, 4.4 per cent to £0.2150 against the British pound and 3.2 per cent to AU$0.3999 against the Australian dollar. The kina, on the other hand, rose by 4.7 per cent to 32.36 yen, while the euro rose by 0.3 per cent to €0.2524. The trade-weighted index (TWI) fell by 1.4 per cent to 27.46 over the same time period as a result of these currency moves. “The level of gross foreign exchange reserves at the end of June 2021 was K8.586 billion, sufficient for 8.6 months of total and 16.2 months of non-mineral import covers. “The Central Bank maintained a neutral monetary policy stance in the June quarter of 2021, keeping the KFR unchanged at three per cent. This was to encourage private sector activity and support the economic recovery. The repurchase agreement facility dealing margins were also maintained at 100 basis points on both sides of the KFR.” In order to regulate liquidity, he added, BPNG has used its open market operation tools in conducting monetary policy.   Reference: The National (15 February 2022). “FX jumped over 6 months in ’21”.

Finance

PNG Business News - January 27, 2022

FX Revenue Up By 10.5%, According to CEO

Photo credit:  According to Robin Fleming, chief executive officer of Bank South Pacific Financial Group Ltd (BSP), the country saw significant amounts of foreign exchange (FX) currency in December. Strong commodity prices, end-of-year dividend payouts, and donor cash for different initiatives, according to Fleming. He stated that foreign exchange receipts increased by 10.5%, or K965 million, from K9.21 billion in the September quarter to K10.175 billion in the December quarter of last year. “FX market turnover rose by 7.4 per cent from a year earlier,” Fleming told The National. “FX market turnover has risen by 9.8 per cent over the past six months, supported by strong commodity prices, in particular oil, copper, palm oil, coffee. “Firmer commodity prices, combined with increased project-specific, donor foreign currency inflows and end of year dividend payments offset the lost FX market inflows from the closure of the Porgera gold mine (Barrick FX inflows down 75 per cent),”Fleming said. “The kina has been stable and unchanged against the US dollar for the past 14 months, however the pullback in the Australian and US dollars amid the Coronavirus (Covid-19) related weakness in the Australian economy, strength in the US economy helped strengthen the kina against the Australian dollar. “The kina is likely to remain stable against the US dollar, while a steady Australian dollar will see improved stability in the kina to Australian dollar cross rate.” However, Fleming predicted that the significant FX inflows in December 2021 would drop in the March quarter of this year. “December FX inflows have substantially reduced outstanding FX orders from high levels seen in November, and this is expected to reverse in January, February with post-Christmas restocking.”   Reference: Luma, Dale. The National (26 January 2022). “FX revenue up by 10.5pc: CEO”.

Finance

PNG Business News - January 05, 2022

Treasurer Happy With Central Bank Modernisation

Treasurer Ian Ling-Stuckey is delighted with the work being done to put the modifications to the Central Banking Act into effect, which were voted unanimously by Parliament last December 2021. Treasurer Ling-Stuckey stated in a statement that following the NEC's decision on a new Acting Governor, Benny Popoitai, the former Head of Financial Analysis and Supervisory Unit and former Deputy Governor, will be sworn in as Acting Governor. This, according to Ling-Stuckey, is the beginning of the reform process to modernize BPNG by increasing governance, accountability, and independence. “The reforms are the result of a comprehensive consultation process involving key firms and institutions in PNG, other central banks in our region and the IMF. The nation must say thank you to the Independent Advisory Group that led these consultations and their 132-page report on reform options.   “The Government has carefully considered these recommendations and is now proposing specific reforms,” he said.  It was regrettable, according to Treasurer Ling-Stuckey, that the former Governor refused to engage with the review process, declining several requests for meetings and failing to designate any BPNG officials to the review Secretariat. “The former Governor wrote to the Prime Minister protesting the review. The time for his input was in the preparation of recommendations to the government from the IAG. He constantly declined to cooperate. It is disappointing that he is now claiming inadequate consultation with himself,” said Ling-Stuckey.  He added further, “The government considered the recommendations of the IAG review and inputs on the recommendations were provided by the IMF, Treasury and eventually even BPNG.   “These were considered by the government and built into the drafting instructions for the State Solicitor and the First Legislative Counsel. The changes received the unanimous support of the Parliament, including being praised by the Leader of the Opposition.”   Treasurer Link-Stuckey urged the outgoing Governor to embrace Parliament's unanimous decision and facilitate a smooth transition to a revamped BPNG.   Reference: Loop (2 January 2021). “Modernising PNG’s Central Bank”. 

Finance

PNG Business News - January 05, 2022

Tax collection hits record K8.1 billion in 2021

Photo: PM Marape launches the new online tax payment platform, MyIRC, with Commissioner-General Koim and managers of IRC Despite a hard economic climate brought on by COVID-19, the Marape Government's commitment in reinvigorating the Internal Revenue Commission (IRC) is paying off with a revenue collection of a record K8.1 billion in the year 2021. During Prime Minister Hon. David Cameron's tenure as Prime Minister, this became obvious. The following is the speech given by James Marape at the unveiling of the IRC's new online tax payment system, MyIRC Online Service Platform. This year is only the third time in the last decade that Government revenue collection has surpassed K8 billion; the first was in 2014, during the first year of PNGLNG production, and the second was in 2018, both of which were comparatively good economic years for PNG, according to the Prime Minister. Prime Minister Marape went on to say that IRC and Customs' determination and desire to accomplish their joint objective despite the Covid-affected economy demonstrates his government's focus on investing resources and providing assistance for tax collectors, which has resulted in a strong revenue return. The government has shown its continued support for IRC by allocating K35 million in the 2022 budget to the Integrated Tax Management system, as well as additional K11 million for goods and service tax administration. The new online tax payment method is anticipated to enhance the functioning of the IRC. The Prime Minister said he was “totally proud” of this “milestone” performance by the tax collectors, who have worked “exceptionally well”, and even above what Treasury had anticipated by K200 million in spite of the terrible period the country is presently undergoing. “We pledged to assist IRC and Customs to the best of our ability, and this is the highest IRC and Customs have received from the Budget to ensure you build up your capacity, ramp up efficiency, and get going,” said the Prime Minister. “I am not someone who lies when I make policy pronouncements; I live up to all my policy pronouncements like I did with the SME funding commitments, the commodity price support and others.” Prime Minister Marape said he was pleased to see the IRC and Customs departments move into the e-service area since this is the way he wants government services to go. This aims to reduce human involvement and manipulation of these vital fee and tax collecting systems. “By the time the country turns 50 years in 2025, all transactions at IRC and Customs should be done digitally,” said the Prime Minister. “As part of the support to these two government agencies, 500 allotments under the National Housing Corporation will be given out to government employees, including those of IRC and Customs as more incentive to work better for our country.”   Reference: PM James Marape News Page (20 December 2021). “Tax collection hits record K8.1 billion in 2021”. 

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Finance

PNG Business News - November 26, 2021

PNGX: Trade Declined Last Year

Photo credit: PNGX The chairman of the PNG Stock Exchange (PNGX), David Lawrence, stated that total transaction figures on the PNGX decreased last year. The 12 listed firms had a combined market capitalization of K91.89 billion. PNG Air Ltd, he added, was still suspended for failing to present audited financial statements. Niuminco, a mining exploration firm, has also been put on hold. “We are seeing an increase in the number of trades on the market but the overall value and volume is down a bit on last year,” Lawrence said. Six of the 12 firms are listed on both the PNGX and the ASX (Australian Securities Exchange). Newcrest, Oil Search, Bank South Pacific Financial Group Ltd, Kina Securities, Coppermoly, and Steamships are among the companies involved. According to Lawrence, the influence of the Coronavirus (Covid-19) on the market and the status of the PNG economy varies depending on the industry. “Companies with activities in tourism and logistics have been impacted while others such as in NGP Agmark in agriculture have seen positive results. “The impact of Covid-19 will be negative on the market next year, especially if the vaccination rate remains at its very low levels. “The ongoing foreign exchange restrictions are also a negative for overseas investors looking at PNG listed companies.” The general election in 2022, according to Lawrence, will have an influence because markets are normally flat throughout the uncertain time leading up to an election. “Two positive signs for 2022 are an increase in the number of enquiries about listing during 2021 and an increase in enquiries from potential new small local investors,” he said. “We believe there are a small number of local companies currently working towards listing on PNGX in the next one to two years, which would be good for the market and will open up new opportunities for investors.” He stated that the PNGX is developing new goods and services.   Reference: Dale, Luma. The National (23 November 2021). “PNGX says trade declined in ’20”.

Finance

PNG Business News - November 18, 2021

Treasurer Welcomes Banking Review

The Independent Advisory Group's examination of the 2000 Central Banking Act was recently welcomed by Treasurer Ian Ling-Stuckey. On October 25, the first phase report was finished and posted on the Bank of PNG's website. Learning from experience, increasing Bank independence, delivering accountability, limiting discretion, and connecting objectives with functions are some of the themes highlighted in the paper. In a statement, Treasurer Ling-Stuckey said: “I support entirely the view expressed by the Chair of the IAG that the review presents an ‘opportunity to strengthen the Bank of Papua New Guinea. “This is very much in line with the terms of reference provided to the Review on 13 May where the Government sought to modernise this key economic institution of the country. “This is an excellent document. It is available on the web and I encourage those seriously interested in advancing our country’s economy to go through the detailed, thorough, objective analysis in the report’s 132 pages. “I thank the members of the IAG; the Chair Robert Igara, as well as Sir Wilson Kamit and Professor Stephen Howes for the long hours they have put into producing such a fine report. “The report has 31 recommendations from its first phase. “It also sets out important issues for review in the second phase of the IAG’s work focused on the regulation of the financial, superannuation and insurance sectors, the application of Anti-Money Laundering and Counter-Terrorism Financing rules, BPNG’s financial management and performance, the shortage of cash in 2021, and improved data communication.   “I agree strongly with the view by the IAG that reforms are now needed, and could have the same transformational impact as the initial reforms 20 years ago. “In going through the report, the immediate focus will be on governance reforms. PNG has been left behind by almost all other countries. We are one of only four countries in the world that focuses all power over monetary policy in one person – we need a more collegiate approach. “We need to correct demonstrated areas of under-performance. This will include moves to strengthen the Central Bank Board. “I will be looking at introducing the highest priority reforms during the coming sitting of Parliament, with further reforms following the second phase of the report,” stated the Treasurer. The Treasurer also thanked Secretariat members for their support of the review, which included the IMF's comprehensive remarks. “I thank all the financial institutions and business organisations that have also participated in the review.”   Reference: Loop (15 November 2021). “Treasurer welcomes banking act review”. 

Finance

PNG Business News - November 08, 2021

BPNG Explains the Importance of Forex

The supply and demand for foreign money dictate how the foreign exchange market operates. Governor Loi Bakani stated in the Central Bank's Monetary Policy Statement that PNG's foreign exchange supply is mostly derived from export receipts, government external loans, grants, and foreign direct investments. Foreign exchange is needed primarily for the import of goods and services, the payment of external debt, dividend and income repatriation, and other transfers. Physical products other than non-goods (service, dividends, transfers, and capital related-flows) normally have a payment time of up to two months before final remittances. Because the foreign exchange orders are inside this window, they should not be confused with outstanding orders. Bakani explained that following the kina's flotation in 1994, the currency fell against the USD and AUD until 2003, after which it remained relatively steady. “The country did not take advantage of this opportunity to develop a robust non-mineral sector where the bulk of the population is engaged in, for employment, exports and revenue generation.  “The Government’s focus then, however, was mainly on the enclave extractive sector.  With the special concessions allowed under the various PDAs, export proceeds of mineral companies are kept in their foreign currency accounts (FCAs) abroad.”  As a result, he noted, the economy did not reap the full benefits of persistent foreign cash inflows. With the establishment of the PNG LNG Project in 2012, a substantial structural shift occurred. “This contributed to the huge current account surpluses, but without corresponding flows into the foreign exchange market. This has undermined the proper functioning of the foreign exchange market and its exchange rate setting role.  “Given the development in the FX market and the exchange rate, a number of external researchers have suggested that the kina is overvalued and not convertible.”  To achieve external balance and support non-mineral private sector activity, a significant depreciation in the exchange rate is required, particularly for exports and import substitution. However, a large depreciation may not necessarily result in the desired supply response in the non-mineral private sector due to structural impediments, according to the Central Bank's own internal assessment. “It also shows that activity in the non-mineral private sector is driven by international commodity prices, domestic prices and Government spending relative to the impact of kina depreciation.  “Since the floating, the kina has depreciated by around 73.0 percent in nominal terms, while the impact on the supply response on agriculture production has been minimal.  “The large depreciation would also have a minimal impact on inflows by the mineral sector, and portfolio inflows.”  Bakani also pointed out that because PNG is an import-dependent economy, a significant devaluation would raise import costs and local inflation, negatively impacting people's well-being. “For instance, a proposed 20.0 percent depreciation of the nominal exchange rate would lead to an increase in inflation of around 8.0 – 10.0 percent, and a further 13.0 percent depreciation will lead to inflation increasing further by around 6.0 – 8.0 percent.  “This would give a 14.0 – 18.0 percent increase over a three-year period. If other determinants of inflation are taken into consideration, inflation would be much higher.” Furthermore, Bakani emphasized that exchange rate movement is a reflection of the economy's current structural problems and should not be viewed as a solution to the external imbalance. While the Bank has made steps to strengthen the foreign exchange market's functioning, the Government must also adopt coordinated policy measures to expand and diversify the export base and stimulate import replacements.   Reference: Loop (4 November 2021). “BPNG Explains Importance Of Forex”.

Finance

PNG Business News - November 08, 2021

FX Liquidity Increases In Q3, According To BSP

According to Bank South Pacific Financial Group Ltd, foreign exchange (FX) liquidity has increased since the second quarter of the year, owing to robust commodities prices mixed with project-specific and donor foreign currency inflows (BSP). The PNG Kina has stayed constant versus the US dollar for the third consecutive quarter, according to the bank's Pacific Economic and Market Insights Q3 2021 Report, although FX reserves at the end of June increased by 7% quarter on quarter, owing to favourable inflow. According to the report, overall foreign exchange reserves were US$2.49 billion (about K8.5 billion) as of June 30.  In June, reserve balances rose 7% quarter over quarter, with positive inflows overcoming the Central Bank's monthly intervention of $50 million (about K171.6 million). While FX liquidity increased by 17% in September, BSP Group general manager for treasury Rohan George noted FX turnover increased by 18% during the previous six months, owing to robust commodity prices, particularly for oil, copper, palm oil, and coffee. “Firmer commodity prices, combined with increased project-specific and donor foreign currency inflows offset the lost FX market inflows from the closure of the Porgera gold mine,” he said. “Momentum in FX market turnover is likely to increase into year’s end. Outstanding FX orders have increased from low levels seen in June, and this is expected to continue in October and November with pre-Christmas import orders. “We expect large foreign currency inflows in late November and December to satisfy any foreign currency backlog. “And to manage reduced FX liquidity, businesses should place FX orders (with correct documentation), as soon as possible, ensure orders are cash-backed whilst awaiting execution, tax clearance certificates are current and reflect the expected FX order execution time,” George added. “It was also reported that the kina has been stable and unchanged against the US dollar for the past 11 months; however, the pullback in the AUD/USD (Australian dollars/US dollars), amid Coronavirus (Covid-19) related weakness in the Australian economy, strengthened the Kina/AUD, and the Australian dollar is expected to outperform into year’s end as the Australian economy opens up.”   Reference: The National (1 November 2021> “FX liquidity rising in Q3: BSP”

Finance

PNG Business News - October 04, 2021

Stock Exchange Rates To Be Eased

A new revised and market friendly transaction levy will be charged on all transactions on the PNG National Stock Exchange (PNGX). Robert Minak, executive chairman of Papua New Guinea's Securities Commission (SCPNG), made the announcement. “We have reviewed the existing levy rate of O.75 per cent and we believe that the quantum of that levy is too high and will disincentivise investors and therefore market activity. “After meaningful consultation with relevant industry stakeholders we concluded that it was necessary to significantly ease the rate,” Mr Minak said. “Levies are proposed as a way to raise government revenue. But levies can harm market quality by unnecessarily burdening the economy by distorting investor’s capital allocation in reducing trade volumes, increase volatility and adversely affect price discovery”. While weare required by law to retain a levy, its rate needs to reflect PNG’s current market conditions,” he added. SCPNG is required by section 44(1) of the Securities Commission Act 2015 (SCA) to maintain a levy and to pay a portion of it to the Capital Market Development Fund under section 429(a) of the Capital Market Act 2015 (CMA). As a result of the combined effect of such measures, the legislative trajectory anticipates that portions of the levies will eventually be transferred to the Capital Market Development Fund. SCPNG agrees that any taxes imposed under section 44(1) SCA should be used to promote market development rather than as a source of revenue for the government. The Capital Market Development Fund should be utilized for the levies of market development (CMDF). For the time being, SCPNG admits that all of the levies are tied to capital market growth in order to provide the market with every chance to expand. The Securities Commission has implemented meaningful governance control and transparency over the levy setting procedures, levy review mechanisms, and projected levies spending based on the findings of the review. In the next months, the governance infrastructure and administrative system will develop. They might include things like reporting on actual spending to industry and rebating taxes that haven't been spent. This newly updated rate will take effect two months after the gazettal is published. Any prior levies collected by a stockbroker or participating organization based on the now-revoked rate (0.75%) must be refunded to buyers or sellers within 14 days. “The reviewed rate is a significant decrease (96 per cent) from the rates presently in effect. “SCPNG hopes these changes will ease stakeholder concerns, maintain market quality and lead to restoring confidence in the market generally,” Minak said.   Reference: Post-Courier (1 October 2021). “Stock Exchange Rates To Be Eased”. 

Finance

PNG Business News - October 04, 2021

Review will Fix FX Worries as well as Competition: Treasurer

The revision of the Central Banking Act, according to Treasurer Ian Ling-Stuckey, would address the shortage of foreign exchange and competition in the banking business. The public comment phase, he added, will begin in the next two weeks. “The independent advisory group for the review of the Central Banking Act 2000 is making good progress on how we can make BPNG and monetary policy work better for the people,” he said. “I encourage people to look at the issues paper and consider the important issues raised. “Public submissions are now coming in.” He said the review was vital. “The current legislation needs to be modernised,” he said. “Why is there still not enough competition in our banking sector? “The gap between what banks pay to depositors and charge to lenders is too high. “Too many of our people still do not have access to banking services. “Too many of our SMEs find it too hard to get loans. “The review is considering if we can do things better while maintaining the bank’s independence. “The lack of foreign exchange is the worst business problem in PNG, bigger than law and order, or lack of skilled labour, or bad infrastructure, according to businesses in the annual CEO survey. “Why is our kina now so difficult to convert to other currencies when it wasn’t an issue 10 years ago?” People were told that the PNG LNG project would prevent such problems, he added.   Reference: The National (24 September 2021). “Review will address forex woes, competition: Treasurer”. 

Finance

PNG Business News - October 04, 2021

Kina Bank to Introduce Global Forex Market to PNG

Following a collaboration between Kina Bank and Everest, an international internet solutions provider, Papua New Guineans will soon have access to a new platform for sending money overseas and trading in foreign currency. Customers will not require a Kina Bank account to use the platform, according to a Kina Bank statement. Kina bank chief executive officer Greg Pawson said: “We want to make banking simple and easy for all customers, no matter who they bank with. “It’s one of many digital and mobile banking services we provide. “An added bonus is that we are working with the Bank of PNG on the regulatory requirements to provide customers with their own digital identity, ushering in a more digital future for everyone,” Pawson said. Everest chief executive officer Bob Reid said: “We are thrilled to partner with Kina Bank to leapfrog antiquated means of moving money. “By customising elements of Everest’s global cloud bank platform, we remotely verify users’ identities digitally and empower them with encrypted accounts and digital transactions for easy, cost-effective money movement.” Customers will be able to self-register using an app or online using their passport as ID, thanks to Everest's biometric identity and virtual account creation capabilities. They wouldn't have to go to a branch or submit any paperwork. Customers may fund their digital wallets with their current online banking accounts and begin foreign currency operations once they have enrolled. Kina Bank and Everest both said that they were dedicated to offering competitive foreign exchange rates and minimal transaction costs to guarantee that their clients could conduct cross-border transactions. Kina was waiting for regulatory permission from the Bank of PNG before launching the service, which was scheduled to happen before the end of the year. The service is for everyone.    Reference: Papua New Guinea Today (25 September 2021). “Kina Bank to bring Global Forex Market to PNG”.

Finance

PNG Business News - August 30, 2021

PNGX and Securities Commission Sign MoU

Photo Credit: PNGX PNGX Markets Limited, Papua New Guinea's national stock exchange, and the Securities Commission of Papua New Guinea (SCPNG) have signed a Memorandum of Understanding on the preservation of an orderly market for listed securities. The Securities Commission may make public remarks regarding a listed business from time to time in the course of its duties and responsibilities that a reasonable person would anticipate to have a substantial impact on the price or value of the listed company's securities. Making such remarks during trading hours (10 a.m. to 4 p.m.) might jeopardize an orderly and fair market in such assets. The MoU intends to foster collaboration between the Securities Commission and the PNGX in order to support the effective performance of their respective duties and responsibilities, as well as the preservation of orderly and fair markets in Papua New Guinea. According to the MoU, the Securities Commission will avoid making public statements about a listed company that a reasonable person would expect to have a material effect on the price or value of a listed company's securities during trading hours, to the extent that it is reasonably practicable to do so. If it is not possible to avoid making such public remarks during market hours: Prior to issuing the relevant public statement, the SCPNG will inform PNGX;  PNGX will impose a trading stop on the relevant listed company's securities; and  SCPNG will provide PNGX with a copy of the relevant public statement for distribution to the market as soon as feasible. “It is fundamental that regulatory governance systems are established to ensure a fair and orderly market,” said Robert Salmon-Minak, acting executive chairman of the Securities Commission. “This MoU recognises and respects the differing but complementary roles of the Securities Commission and PNGX in achieving that outcome. “The capital market regulator in any country plays a critical function in the economy of that country,” said PNGX chairman, David Lawrence. We are pleased to be working with the Securities Commission to put in place processes that promote confidence in the PNG capital market.”   Reference: Post-Courier (27 August 2021). “Securities Commission, PNGX Sign Agreement”.

Finance

PNG Business News - August 30, 2021

BPNG: Headline Inflation to be About 4%

Photo Credit: UMM PNG The Bank of PNG (BPNG) expects headline inflation to be about 4% this year, down from 5.1 per cent in December of last year. The raw inflation amount provided by the consumer price index is known as headline inflation. Inflation in Papua New Guinea climbed from 2.9 per cent in 2019 to 5.1 per cent in December 2020, according to BPNG governor Loi Bakani. “This was because of the impact of the Coronavirus (Covid-19) pandemic with rising prices for seasonal products as the supply chain of some of these products went up and prices in medical services also increased,” he said. “We are lucky at the moment because inflation is not that high.” However, he said the rates did not reflect the real people faced every day. “This statistical indicator of what the movement of prices is over time, (and) does not tell you the real prices on the shelves, the markets, service fees,” Bakani said. “They are totally two different things.” He stated that the government continues to confront budgetary problems in 2020 as a result of poor tax collection and higher spending compared to 2019. Bakani attributed this year's economic rebound to the relaxation of lockdown measures, fiscal stimulus in key economies, vaccine rollouts in the second half of 2020, and new business models. However, he added, there are still concerns about the development of a new Covid-19 strain, the growing mortality toll, vaccine rollout pace, and the efficiency of different policy initiatives. He cautioned companies and individuals against lowering their guard.   Reference: The National (24 August 2021).”BPNG predicts headline inflation to be around 4pc”.

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