KAML records K3.3mil profit

THE Kina Asset Management Ltd (KAML) has recorded a net profit of K3.32 million for the year ended Dec 31, 2020, driven by an investment return of 6.2 per cent for the year.
KAML chairman Sir Rabbie Namaliu said it was achieved despite the Covid-19 pandemic and ongoing geo-political tensions.
The resulting market volatility caused a collapse in global equity markets early in the year, followed by a strong recovery in some markets.
Sir Rabbie pointed to the diversification in KAML’s investment strategy for providing a significant measure of stability in a troubled year.
He said: “Asset allocation was maintained close to the preferred portfolio asset weights of 40 per cent domestic/60 per cent international, the latter being held in Australian stocks and global indexed funds. For KAML, this meant overall capital losses were more than offset by dividend and interest income and strong foreign exchange gains.
“Bank of South Pacific, KAML’s core domestic shareholding, comprising nearly 20 per cent of the portfolio, generated a return of 13.3m per cent for the year.
“Credit Corporation also performed strongly.”
But Sir Rabbie said Oil Search and Kina Securities suffered significant reversals.
“Oil Search, badly affected by the pandemic-related fall in the global demand for oil, reported a negative return for the fund of -39.6 per cent,” he said.
“Offshore, the recovery in Australia was less strong than in other markets, notably the United States.
“The year ended with modest overall capital losses on the Australian component of the portfolio, but the strength of the Australian dollar and a series of gradual reductions in the PGK/USD trading band by the Bank of PNG, more than offset this.”
Sir Rabbie said the net tangible asset backing per share as at Dec 31 was K1.59.
“However, KAML’s price of K0.90 per share, represented a substantial discount to the underlying value of the company.”