Firm suspends investment in Aust amid pandemic

KINA Asset Management Ltd (KAML) has suspended its investment programme in Australia until the impact on economic conditions becomes more certain, chairman Sir Rabbie Namaliu says.
He told the annual general meeting that Australia’s response to the Covid-19 pandemic had been among the world’s most restrictive, and included both international and state border closures, and lockdowns.
“As a result, the company suspended its investment programme in Australia until the impact on economic conditions became more certain,” Sir Rabbie said.
“The company’s Australian investments reported capital losses of K3 million for the year, and dividend income fell from to 0.9 million in 2019 to K0.6 million in 2020.
“However, the Australian dollar rose strongly against the PNG kina during the year, and foreign currency gains of K6.3 million were recorded,” he said.
“The company’s shares again traded in very light volumes during 2020, and closed at year-end at a price of 95 toea per share.
He said this represented a discount of 40 per cent to the company’s net tangible asset backing of K1.59 per share, and was not reflective of either the company’s historical performance or the quality of its underlying assets.
Turning now to the current year, Sir Rabbie said a combination of fiscal and monetary stimulus, along with the rapid progress of vaccination programmes, had led to a strong recovery in economic growth in most developed countries.
“In Australia, the success of Federal and State governments in controlling the pandemic appears to have led to some slowness in easing restrictive measures when compared with their counterparts in the US and Europe. Global share markets have continued their recovery.
“For the five months to May 31, 2021, the main stock indices in the US, Europe and Australia have all risen strongly: in the US, the S&P 500 index has risen 11.3 per cent; in Europe, the Euro Stox index is up 13.7 per cent; and in Australian, the ASX 200 has risen 8.7 per cent.
“For the year to May 31, 2021, the preliminary return on the company’s investments was 9.7 per cent, and the NTA has increased to K1.68 per share.”