MIXED YEAR FOR PNG’S FINANCE MARKETS

The key economic and financial indicators in Papua New Guinea’s economy reveal that 2016 was a mixed year. The equity markets performed reasonably well. Interest rates were high, favouring investors. Commodity prices mostly recovered, but the currency weakened.

The nation’s bourse is the Port Moresby Stock Exchange (POMSOX). Last year, there was a significant disparity between the dual-listed stocks (recorded on the Kina Securities Index, or KSI) and the stocks listed only in PNG (the KSI Home Index). The KSI was up by 40.8 per cent for the year while the KSI Home Index was up 10.7 per cent for the year. Both indices performed better than their Australian equivalent: the All Ordinaries Index was up only 7.5 per cent. America’s S&P 500 Index was up 9 per cent over the year.

The giant of the PNG stock market, Bank South Pacific, was up 20 per cent for the year. Many of the dual-listed stocks performed well. Resources giant Oil Search was up 24.5 per cent over the year and Newcrest Mining was up 76.9 per cent. The newly dual-listed Kina Securities had a modest year; its shares were up 1.9 per cent over the year.

There were positive developments in the commodities markets. Oil and gas prices were up in 2016, according to Kina Securities. West Texas Intermediate (light crude oil) rose by 46.9 per cent for the year, recovering from the price drops of 2015. LNG prices (Japan/korea) rose more modestly: by 12 per cent, according to Kina Securities.

Palm Oil was strong, rising by 38.4 per cent and coffee was up 9.5 per cent. Cocoa, however, fell by a third over 2016.

Precious metals and copper were strong, a positive for PNG’S mining. Gold rose by 9.2 per cent over the year and silver was up 16.3 per cent. Both metals have remained strong in early 2017. Copper was up 15.8 per cent in 2016.

In 2016 PNG’S currency, the kina, was down 5.3 per cent against the US dollar, 4 per cent against the Australian dollar and 8.2 per cent against the Japanese yen.