Investment firm eyes new assets

INVESTMENT management company Kina Asset Management Limited (KAML) said on Friday it had resumed its long term investment strategy and acquired new global funds assets.
KAML said it had also increased its domestic investments by acquiring equities on the Australian Stock Exchange (ASX) and the Port Moresby Stock Exchange (POMSoX), chairman Sir Rabbie Namaliu said in a statement.
Sir Rabbie said the company’s investment manager had initiated a reduction to the current exposure of fixed deposits, which had been in place since the third quarter of last year.
He said KAML had continued its declared strategy of assessing the broad range of investment opportunities both locally and offshore and had decided to move into the global funds market with some strategic acquisitions. Sir Rabbie said some key opportunities had been identified within the United States, Australia and PNG markets.
“There are signs of the commencement of recovery in some key economic sectors and that it is opportune for KAML to move into the equities market,” he said. “KAML had commenced its program of acquisitions soon after its successful launch in July last year, but ceased the program in the third quarter, diverting a large percentage of its investment funds into the more secure money market sector with a range of fixed deposits.
“This strategy has proved to be wise and whilst in our first six months the fund operated at a slight loss, we remain poised with solid reserves to re-enter the broader marketplace which is in line with our commitment to shareholders.
“There are some signs that in several key sectors the global economic downturn has slowed and the world economy appears to be showing some improvements and is slowly returning to positive growth. “As an investment management group, we are making a considered move to be more active in the market and we will continue to look for further opportunities to increase the portfolio.”
Sir Rabbie added that the PNG economy had felt the strain of the global crisis and shares in Bank South Pacific and Credit Corporation had been particularly affected, which reflected the international trends impacting on KAML’s portfolio.
“However there is clear evidence that the major projects currently in the pipeline for the country were being actively pursued and the forecasts for the economy were very encouraging,” he said.
“The fact that the early works for the PNG LNG project have been forecast to commence shortly is an important milestone for the future.”
Sir Rabbie said KAML had reported positive growth in its investment portfolio from December 2008 and during the first quarter of 2009.
He said the company was working hard to ensure that shareholders were kept up to date with the progress of their investments.
He said a new comprehensive website would be launched shortly, which would enable shareholders to have detailed information about the companies and organisations in which their funds were invested, and allow investors to link directly to shareholdings within
the KAML share registry.
Sir Rabbie said the company’s first annual general meeting would be held on July 29.




BSP targets Colonial Fiji [Monday, June 29, 2009]
*Leading bank wants to boost lending once ExxonMobil-led LNG project takes off
By SHEILA LASIBORI
BANK South Pacific (BSP) is working to increase its capital to about K1 billion by next year, Ian Clyne, BSP’s chief executive officer, said.
“So that we can be a more active participant in the ExxonMobil-led liquefied natural gas (LNG) project in terms of lending ... we have increased concentration limits in terms of exposure to specific industry sectors and major clients,” he added.
The bank is also looking to raise K100 million from its “tier 2 notes” offer, he said.
He explained that due to compliance and regulatory issues for several institutional investors, BSP was still trying to finalise the issue.
He said BSP’s capital raising drive would also support its ongoing Pacific strategy should an interesting investment materialise.
“BSP is already a very well capitalised bank,” he said following reports of BSP in talks with the National Colonial Bank of Fiji to purchase its Fiji operations.
He said BSP’s capital raising strategy was linked to the medium term objects of the bank. He said Colonial Fiji was always viewed as an entity BSP was very interested in acquiring, as was the National Bank of Vanuatu and a privately-owned bank of Samoa.
“BSP will continually look for high value acquisition opportunities, but our focus for the next six to 12 months will be on improving service quality in PNG, and if we proceed to acquire Colonial Fiji, will integrate Colonial into the BSP family,” Mr Clyne said.
Colonial National Bank has a 20% market share, 17 branches and 31 automatic teller machines (ATM).
But while BSP looked to expand in the region, Mr Clyne said PNG would always be the centre of its banking activities and where it focused majority of its activities.


InterOil to boost PNG investment
INTEROIL Corp plans to increase capital investment in Papua New Guinea following the closure of the recent US$70 million (K188 million) direct stock offering.
“We believe we are now in the best financial position in our history … the company is on track to achieve a robust and vibrant future.
“We intend to take advantage created by the current global downturn in industry activity to accelerate our upstream (exploration) activities,” Bill Jasper, InterOil president, said when he announced the capital investment plan.
He said InterOil was currently inspecting a number of drilling rigs with the aim of purchasing an additional rig for use in its Gulf province exploration programme (Elk/Antelope 1).
Mr Jasper said the company also planned to acquire additional seismic data to delineate the Elk/Antelope structure and to prioritise a number of adjacent prospects.
“This increased activity should accelerate our growth plans and position us to develop and derive greater value from our asset base,” he said.
Gas from the Elk/Antelope fields is expected to feed the proposed InterOil-led liquefied natural gas project of which InterOil is a foundation member.
The project is expected to boost job generation, government revenues and balance of payments position.




THE Airlines PNG special fare to many domestic destinations are so successful that they have been booked out from Mt Hagen through Goroka to Lae for a full three weeks in advance. It just shows what innovative selling can do.
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And then there is the mad, mad sale by MAF for its Mt Hagen to Goroka flights. For a limited period only, the third level airline, dubbed the “bushmen’s bus”, is selling tickets for just K50. With bus fare between the two ports at K20, this price is a steal.
***
One wonders what kind of telephony and telecommunications services Papua New Guineans would be enjoying today if there had never been any competition. Why is the Government so slow on introducing competition in other vital service areas such as air transportation, supply of electricity and port services?
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Here is a message from a friend of PNG in the US. “I have been here for 15 years now, teaching in a high school. Prior to that, I was teaching at Dregerhafen High School in Finchhafen for nine years, then to Bugandi and Lae High before coming to the US. I have sponsored two students from Bumayong High School (which is my former school), one from Gordon High School and one from a community school in Hohola in the last five to seven years. My biggest desire is for these students, if they reading this article, to please get in touch with me as I love to know how they are doing. My email is aralnen@hotmail.com

June 18, 2009
LNG venture can support third output unit: UBS
SYDNEY: ExxonMobil Corp’s A$12.5 billion (K34.2 billion) liquefied natural gas (LNG) venture in PNG has enough resources to support a third production unit that could come on stream by 2017, UBS AG said.
Spending on the initial phase of the project would make it cheaper to build an additional production unit, which could be completed for about A$3.5 billion (K9.6 billion), UBS analysts said in a note.
The venture has “defined resources that are highly supportive” of a third train, or unit, UBS said.
Exxon and its partners had given the go-ahead to build the project before the year-end, Oil Search Ltd, the second-biggest stakeholder in the venture, said.
PNG LNG is among more than 10 proposed projects in Australia and PNG seeking to tap a forecast increase in demand in North Asia for cleaner-burning fuels.
The venture plans a two-production-unit gas liquefaction plant near Port Moresby, with gas sourced from PNG’s highlands.
The project would have a capacity to produce 6.3 million metric tonnes of LNG a year.
The third train, with a capacity of 3.15mt a year, could come on stream by around 2017, assuming a final investment decision was made about a year after the project start-up, UBS analysts led by Melbourne-based Gordon Ramsay said in a June 10 note to clients.
Resources would need to be converted to reserves to support the additional train, UBS said. – Bloomberg



June 18, 2008
PM commends RH for K1 billion Vision City project
PRIME Minister Sir Michael Somare has commended the Rimbunan Hijau (PNG) Group for its loyalty and continued investment in the country.
He said the group had remained steadfast through both good times and bad, while some companies folded up and left.
“They remained so despite negative criticisms from various parties, and is reaping the rewards,” he said when launching the group’s K1 billion Vision City project at Waigani yesterday.
He thanked the group for having the vision for such a grand project that would, he said, not only add to its assets but would also be a big boost to the country’s economy.
He said he was pleased that RH had been branching out from its traditional logging business, and going into transport, media, retail and now commercial property.
Sir Michael gave an assurance that the Government would continue to work closely with the private sector to help develop the country and improve the people’s standard of living and quality of life.
He said that of late, there had been several other significant investments in the country.
“And just recently, we witnessed the signing of the LNG agreement between PNG and Exxon Mobil worth over US$10 billion.
“My government has also invested millions in the Lae port project.
“Only a stable government with prudent financial management could ensure a good environment for businesses,” he said.
In his speech, RH Group chairman Tan Sri Datuk Tiong Hew King said PNG’s economy had improved greatly in the past two years, partly due to the Prime Minister’s leadership and government policies.
He said he had great confidence in the country and people and Vision City was proof of this.
“It is a long-term investment and I am confident the project will bring growth and prosperity to Port Moresby and the country,” he said.
Tan Sri Tiong said the project would take between seven and 10 years to complete and its construction would create about 1,800 jobs.
“When completed, the project would also create thousands of jobs and the retail operations in the Mega Mall alone would generate K200 million of economic activity a year.”
He said RH was approaching its 20th anniversary in PNG, dispelling claims that it would only be in the country for the short-term.
“The past 20 years have proved them wrong. The next 10 years and more we will continue to prove them wrong,” he said.
Vision City is located opposite the Sir John Guise Indoor Complex and adjacent to the City Hall and Waigani Office Complex.
It will have a three-storey Mega Mall housing a hypermarket, 50 retail outlets and restaurants, a hotel with more than 290 rooms and 120 serviced apartments, a convention centre that can accommodate 2,000 people, and a 10-storey block offering 60,000 sq metres of office space.
The hotel is expected to be managed by an international chain.
Guests at the launch were impressed by the magnitude of the project and were unanimous that it would be a great boost to the country.

Kina Securities surges to all-time high
KINA Securities Index surged as better performances were recorded for Bank South Pacific, Oil Search and Ramu in yesterday’s trading, reaching an all-time high of 7,189.95 points on the Port Moresby Stock Exchange (POMSoX).
The index surged passed the 7,000 points mark on Monday, and gained further territory in yesterday’s trade to settle at 7,189.95 points.
Kina Finance said with only six months into the year and the Kina Securities Index (KSi) has surged into the 7,000 points mark, surpassing trend predictions made at the start of the year.
At the close of trade yesterday, KSi recorded an all time high of 7,189.95 points on POMSoX, driven by the share price movement of Bank South Pacific, Oil Search and Ramu Sugar.
BSP gained K0.02 to close at K1.15, Oil Search (OSH) gained K0.01 to close at K14.41 and, Ramu Sugar (RMU) gained K0.38 to close at K6.50.
New Britain Palm Oil (NBO) gained K2.90 to close at K29.00 on Monday, however, its performance yesterday was dismal, recording no trades.
The KSi yesterday recorded an increase of 27.02% or 1,529.43 points since trading started this year at 5660.52 on Jan 1.
The market capitalisation has also increased by 24.48% from over K36 billion to over K44.8 billion.
For four consecutive years now, the local bourse has delivered double digit returns, placing the Port Moresby Stock Exchange amongst the best performing markets in the world.
“With our buoyant economy, particularly spurred by the resources and construction industry, the KSi performance is a reflection of the confidence and growth in the locally listed stocks,” chief executive officer of Kina Securities Limited Syd Yates said.
He said he was particularly pleased to see that more and more Papua New Guineans were looking at additional ways of investing their money, and venturing into shares and investment properties apart from their superannuation investment.
“The recent initial public offering of both Airlines PNG and Kina Asset Management Limited has seen many new clients trying their hands at shares investment for the first time,” Mr Yates said.
Since BSP’s 10-for-one share split on June 3, its share price has increased by 12% with a market capitalisation of K5.103 billion.
Since NBO’s listing on the London Stock Exchange late last year, the share price has gained strength, closing at K29.00, which is an increase of over 262% to give the company a market capitalisation of K3.480 billion.
Since Oil Search signed and executed a gas agreement with the PNG Government last month to enter the next LNG phase (front end engineering and design), the share price has gained momentum each day.
Compared to the same period last year when OSH was trading at K8.03, OSH has gone up by K6.38 or close to 80% to give the company a market capitalisation of K17.18 billion.
Ramu Sugar Limited’s share price closed yesterday at K6.50 which is an increase of over 100% above the K3.24 price, which it was trading at 12 months ago.
The market capitalisation today for Ramu stands at K144 million.
Oil Search MD awarded CBE
OIL Search managing director Peter Botten has been awarded Commander of the Order of the British Empire (CBE) in the 2008 Queen’s Birthday Honours List for services to commerce and the mining and petroleum industry in Papua New Guinea.
Congratulating Mr Botten on his award, Oil Search’s executive general manager for PNG and external affairs Gerea Aopi said Mr Botten had been involved in the PNG petroleum industry since 1992 and had been managing director of Oil Search since 1993.
“On behalf of the management and staff of Oil Search Limited, I congratulate Mr Botten on this award, in recognition of his services to the mining and petroleum industry, both as managing director of Oil Search Limited and as president of the PNG Chamber of Mines and Petroleum,’’ Mr Aopi said.
Mr Aopi said during that time, Oil Search had grown from a market capitalisation of less than A$300 million (K773 million) to where it is presently valued at almost A$7 billion (K18 billion) and is listed in the top 50 companies on the Australian Stock Exchange.
He said this growth had been largely driven by investment in the oil and gas industry in PNG, where the company now operates all producing oil and gas fields and is a major partner with ExxonMobil in the PNG liquefied natural gas (LNG) project.
“I am deeply honoured to be recognised in this way,’’ Mr Botten said.
“This award reflects a commitment by all people at Oil Search to develop the oil and gas business in Papua New Guinea and contribute to the growth of the nation in a socially responsible way.’’


PETALING JAYA: Malaysian tycoon Tan Sri Datuk Tiong Hiew King is among the four prominent figures in Papua New Guinea to have been knighted Monday in this year’s Queen’s birthday honours.
PNG Opposition leader, Sir Mekere Morauta was bestowed with the highest award and was named a Knight Commander of the Order of St Michael and St George (KCMG).
Tiong was knighted a Knight Commander of the Most Excellent order of the British Emprie (KBE) together with PNG Deputy Prime Minister Dr Puka Temu, and PNG Central Bank governor Wilson Kamit.
The three new knights will now be addressed by their first names as Sir Puka, Sir Hiew King and Sir Wilson.
The new knights were among more than 90 people recognised for their services to the country in this year’s Queen’s Birthday Honours and Awards.
Sir Puka was recognised for his services to public administration, politics and community; Sir Hiew King, chairman of the Rimbunan Hijau group, was recognised for services to commerce, community and charitable organisations. He is also the chairman of Pacific Star Limited, which publishes The National.
Sir Wilson was recognised for services to the Bank of Papua New Guinea.
The next highest award of Companion of the Order of St Michael and St George (CMG) was bestowed on Reverend Bishop Ambrose Kiapseni for services to the Catholic Church as bishop of Kavieng.
Attorney-General and Justice Minister Dr Allan Marat received an Order of British Empire (civil division) CBE for services to law, National Government and the East New Britain community. (MySinchew)
MySinchew 2009.06.16