MIXED YEAR FOR PNG’S FI­NANCE MAR­KETS

Business Advantage Papua New Guinea - - Economic Update -

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.

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