Kina reports half-year net profit of K5 million


KINA Asset Management Limited has reported a net profit of K5 million for the half-year ending June 30, 2017 – an increase of 48.24 per cent compared to the corresponding period last year.
Board chairman Sir Rabbie Namaliu said the half-year had delivered a strong investment performance for shareholders with the KAML performance generating an investment return of 9.5 per cent.
Sir Rabbie said the main contributors to the result resulted from a valuation gain of K3.4 million “achieved by strong performances of the share prices of CSL Ltd (CSL) of 37.5 per cent and Bank South Pacific of six per cent over the review period.”
“Dividend and interest income delivered K2.1 million, while the 6.1 per cent depreciation of the kina against the Australian dollar contributed currency gains adding K2 million to the profit result,” he said.
Sir Rabbie said the asset allocation at the year end of the result period was 41.6 per cent invested in domestic stocks, cash and fixed income and 58.4 per cent invested with international stock and cash.
“The fund’s key investment sectors of domestic and international equities outperformed their respective bench marks over the year,” he said.
KAML’s key portfolio stocks were BSP at 21.5 per cent of the fund, Vangaurd International at 11.7 per cent, Oil Search Limited at 7.7 per cent and Mirvac Group at 5.3 per cent.
“The first six months of the financial year has started well, with global markets remaining strong, underwritten by high-levels of liquidity, ongoing low interest rates and low inflation, together the United States earning season being well ahead of expectations,” he said.
“Domestically, the economy remains under pressure. However KAML’s investments are largely in sectors not exposed to domestic consumption.”
He said KAML remained cautious for the balance of the year as markets were generally highly valued and global geo-political risk remained a threat to the markets.
“We retain a solid liquidity position which is held off-shore. This will be of benefit as opportunities arise given our view that the Kina will further weaken over the rest of this year,” Sir Rabbie said.
“KAML’s net tangible asset backing per share was Kl.26 at June 30, 2017 (unaudited and pre dividend) up from Kl.14 at the end of June 2016.
“The share price was trading at a significant discount to the underlying value of the company and the board continued to investigate ways to close this gap.
“Options being explored range from a potential buyback to a possible listing on a foreign exchange to broaden our shareholder base and improve liquidity in the stock over time.”

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